France: French pension “impatriate” regime: exemption from affiliation and from payment of pension contributions

In principle, every employee recruited from abroad to take up a position in France is affiliat­ed to the compulsory French social security schemes for basic and supplementary retirement pension insurance.

However, by exception, these so-termed “impatriate” employees can, upon express and joint request with their employer, elect not to be enrolled therein. This pension ”impatriate” regime can be jointly applied with the favourable income tax “impatriate” regime.

This exemption from affiliation, and accordingly from payment of the related pension contri­butions, is conditional upon:

• being able to produce proof of a minimal annual contribution of €20,000 paid by the employee and/or employer for one or more other French or foreign pension insurance schemes, provided that these schemes do not allow an early exit for reasons other than retirement, apart from in exceptional cases provided for by the pension insurance prod­ucts concerned;
• being able to provide proof that the employee concerned was not, during the five calen­dar years prior to commencement of the new position, affiliated to a compulsory French pension insurance scheme (except for ancillary or seasonal activities or activities related to their presence in France to study there);
• being recruited from abroad to take up a position in France since 11 July 2018.
   

Note: disregard of the above-stated exemption conditions will entail cancellation of the exemption and payment by the employer of a sum equal to 1.5 times the amount of the contri­butions that would have been paid if the employee had not benefitted from the exemption.

This exemption is granted only once for the same employee for a period of three years and renewable once. The period covered by this exemption does not give entitlement to any benefit from a French statutory pension insurance scheme.

The exemption application, to be drawn up according to the model set by decree, must be sent to the URSSAF (French social security contribution collection body) at least 60 days before the employee’s affiliation to the French social security system. Failing which, the employer may still request a reimbursement of the pension contributions paid during this period running from the date of affiliation to the date of the request.

The application should also contain:

1. Certificates of payment by the employer and the employee, or the contracts or docu­ments attesting to the commitment to pay, a contribution of at least €20,000 per year on pension insurance products. The employer must be able to attest to this payment each year throughout the entire exemption period;
2. A sworn statement by the employee that he/she was not subject to the French statutory social security scheme at any time during the 5 calendar years preceding that of the commencement of the new position;
3. The employee’s pay slips or equivalent documents for the five-year period of employ­ment prior to entry into the exemption mechanism.
    

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