France Inbound Assignee Regime: Tax Savings Guide for US Expats
Money-saving news: According to France’s Ministry of Economy and Finance, qualified foreign employees can exempt up to 50% of their income from French taxes through the Inbound Assignee Regime. Most US expats eligible for this benefit save €15,000-€30,000 annually while maintaining full US tax compliance.
The France Inbound Assignee Regime (Article 155 B of the French Tax Code) provides substantial French tax exemptions for foreign employees assigned to work in France. You can choose between a flat 30% exemption on your total compensation or exempting actual expatriate allowances, and the good news is that these French tax savings typically reduce your overall global tax burden.
At Greenback Tax Services, we’ve helped over 23,000 expats file over 71,000 returns while maintaining a 4.9-star average on TrustPilot. Here’s what we want you to know: most American expats in France using this regime owe little to no US taxes when their French and US tax strategies work together correctly.
Quick Eligibility Check: Do You Qualify?
You’re likely eligible if you meet these straightforward requirements:
- Recent Move to France: You must not have been a French tax resident for the five years before your assignment. This applies regardless of nationality—American citizens qualify like any other foreign national.
- Employment Structure: You need either direct employment with a French company or an intra-group transfer assignment to work in France.
- French Tax Residency: You must become a French tax resident during your assignment (typically automatic after 183+ days in France).
- Simple Application: You elect this regime annually on your French tax return with supporting documentation.
Your Two Money-Saving Options: Choose What Works Best
The regime offers two approaches. You can switch between them annually based on your situation.
Option 1: 30% Flat Rate Exemption
- How it works: Exempt up to 30% of your gross annual compensation from French income tax.
- Best for: Expats with straightforward salary packages.
Real example – Sarah from Chicago:
- Annual salary: €120,000
- 30% exemption: €36,000
- French taxable income: €84,000
- French tax savings: approximately €14,400 annually
Option 2: Actual Allowances Exemption
- How it works: Exempt specific expatriate allowances and foreign workday compensation from French tax.
- Best for: Expats with substantial employer-provided allowances.
Qualifying allowances include:
- Housing cost reimbursements
- Children’s school fees
- Cost-of-living adjustments
- Tax equalization payments
- Home leave travel expenses
Real example – Michael from San Francisco:
- Base salary: €100,000
- Housing allowance: €30,000
- School fees: €15,000
- Other allowances: €10,000
- Total exemption: €55,000
- French tax savings: approximately €22,000 annually
How This Benefits Your US Taxes (The Good News)
Key point: The Inbound Assignee Regime reduces your French taxes, and this typically means lower overall global taxes for US citizens.
Using the Foreign Tax Credit
The French taxes you do pay often eliminate your US tax liability through the Foreign Tax Credit. This dollar-for-dollar credit frequently results in zero US taxes owed.
Typical outcome for high earners:
- Gross income: $150,000
- French taxes after regime benefits: $25,000
- US taxes before credits: $30,000
- Foreign Tax Credit applied: $25,000
- Final US taxes owed: $5,000
Foreign Earned Income Exclusion Coordination
You can also exclude up to $130,000 (2025 tax year) from US taxation, though the Foreign Tax Credit often provides better results for high-tax countries like France.
Key Rules That Protect Your Benefits
The Reference Salary Floor
Your taxable French income cannot fall below what a comparable French employee would earn. This prevents artificially low taxable income but rarely affects well-structured packages.
Foreign Workday Benefits
Income from days worked outside France for your French employer can be exempt—just maintain records of travel dates.
Investment Income Advantages
You can exempt 50% of foreign-source dividends, interest, and capital gains from French taxation, in addition to your salary exemptions.
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Simple Steps to Apply and Maintain Benefits
Year 1: Initial Application
- Complete your French tax return by the May deadline
- Include Form 2042 with your regime election
- Attach supporting documentation (employment contract, assignment letter)
- Choose your preferred exemption method
Annual Requirements
- Renew your election each year on your tax return
- Update documentation if your situation changes
- Track foreign workdays if claiming those exemptions
- Maintain records of allowances and benefits
US Tax Coordination
File your US return using Form 1116 for Foreign Tax Credits or Form 2555 for the Foreign Earned Income Exclusion.
Practical Tips for Maximum Benefits
- Work with your employer: Structure your compensation package to optimize the mix of salary and allowances based on your chosen regime option.
- Keep good records: Maintain documentation of workdays abroad, allowance justifications, and regime elections.
- Plan your eight-year timeline: Consider career moves and family changes within the regime’s time limit.
- Coordinate tax strategies: Your French tax savings should complement your US expat tax approach for maximum benefit.
Important Deadlines You Need to Know
- French tax return: Generally due May 31st (extended to June for online filing)
- US tax deadline: June 15th automatic extension for expats, with final deadline of October 15th
- Regime election: Must be made by your French tax return deadline—cannot be added retroactively
- Duration: Maximum eight years from your first year working in France
Common Situations and Outcomes
- Tech executives from high-tax US states often see significant overall tax reductions when combining French regime benefits with US foreign tax credits.
- Corporate assignees with families: School fee exemptions and housing allowances frequently make the actual allowances method more beneficial than the 30% flat rate.
- Finance professionals in Paris: High salaries combined with regime benefits often result in zero net US tax liability.
- Consultants with international travel: Foreign workday exemptions can provide additional savings for those working across Europe.
Your Next Steps: Start Saving on Your French Taxes
- If you’re newly assigned to France, apply for the regime immediately and coordinate with your US expat tax strategy for maximum global tax efficiency.
- If you’re already in France, you can start applying from your next tax return. You cannot claim past years, but future savings begin immediately.
- If you’re planning your assignment, work with tax professionals to structure your compensation and tax approach before you move.
Why Professional Help Maximizes Your Savings
The Inbound Assignee Regime involves calculations, documentation, and coordination with US tax obligations. Professional guidance ensures you maximize French savings while maintaining US compliance.
Greenback Tax Services handles these exact situations regularly. Our CPAs and Enrolled Agents live in 14 time zones (many are expats themselves) and know how to optimize both your French regime benefits and US tax positions.
We’ve helped over 23,000 expats file over 71,000 returns while maintaining our 4.9-star TrustPilot rating. Our experience means you’ll have confidence that both your French benefits and US compliance are handled correctly.
Ready to maximize your tax savings?
Most French assignment situations result in significant tax savings when appropriately handled. Contact us, and one of our Customer Champions will explain how this regime can benefit your situation. If you’re ready to be matched with a Greenback accountant specializing in international assignments, click here to get started.
For specific questions about your assignment package, you can also schedule a consultation with one of our expat tax experts.
This article provides general information about the France Inbound Assignee Regime and US tax coordination. Individual situations vary, and you should consult with qualified tax professionals in both countries about your specific circumstances.
Who doesn’t love a tax break? Download our easy-to-use excel calculator to get an estimate of how the foreign earned income exclusion can save you money.
