Tax Alert

International mobility: Tax simplifications brought in by the PLF 2023

Marik Viollet,
Apolline Bertolotti

The draft of Finance Bill for 2023 as adopted in its first reading in the National Assembly introduces few new developments in terms of personal taxation. The more noteworthy changes include however, a simplification of tax formalities for some foreign employers, and reforms to the French tax regime in view of the Paris 2024 Olympic Games.

Application of tax instalments for foreign employers of French employees

The current withholding tax system in France (PAS) imposes heavy tax reporting obligations on foreign employers whose employees have performed at least part of their salaried activity in France.

A reduction in the burden of tax formalities to be completed by foreign employers has been proposed. This will entail substituting the existing system of monthly declarations and the PAYE mechanism for the payment of income tax by instalments for income received from 1 January 2023.

Foreign employers would be able to benefit from this measure when their employees are:

  • Resident in France and only work there for less than 25% of their total working time; or,
  • Resident in France and are covered by a compulsory French social security scheme according to Article L 380-3-1 1 of the Social security Code and pay their own social security contributions (the case of cross-border workers residing in France and working in Switzerland who have opted for affiliation to the compulsory social security scheme in France).

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