Summary
Expatriation bonus
An expatriation bonus is a bonus which supplements the expatriate’s salary and aims to compensate for the difficulties related to working abroad, living conditions in the country of expatriation, and distance from the country of origin.
Taxation of expatriates
With regard to the taxation of expatriates, the General Tax Code provides for a exemption of the expatriation allowance. Thus, the additional remuneration resulting from the professional exercise abroad are not taxed if they are indeed related to the mission of the expatriate. However, the premium remains subject to social security contributions.
To benefit from an expatriation bonus, the employee must have his tax domicile in France (without nationality criteria) and have concluded an employment contract with their employer.
Prior written agreement for the expatriation bonus
In practice, the future expatriate and his employer must put in place a written agreement priorwhich often takes the form of an addendum to the employment contract, and which will set the amount of the expatriation bonus.
Finally, it is important to keep Carefully examine all the documents and supporting documents taken into account in calculating the premium: plane and train tickets, and any document justifying the stay abroad within the framework of a professional mission.
Amount of the expatriation allowance
The expatriation bonus is not a legal obligation, and it cannot exceed 30% of the expatriate’s salary, and is generally between 5 and 15% of the gross or net salary. The percentage depends on the country, and some criteria related to it: dangerousness and political situation, climatic conditions, hygiene and sanitary conditions, remoteness, state of infrastructure, etc. The premium is practically no longer valid within the framework of the internal expatriations to the European Union.