# Is there a tax-related time limit on expat contracts?



## Rick8 (Nov 30, 2012)

Hi, 

My situation is I'm a UK national currently in France and have been here for nearly 4 years. My UK company is keen for me to return soon but have not offered a specific role yet. Also my 'mission' with the French company has an agreed maximum time of another two and a half years, which would take me to a six and a half years as an expat

The UK company has just mentioned something I would like to check with forum members. This is that there is a tax-related limit of 5 years for the expat benefits, beyond which there would be additional costs of tax. In response to my question, they are checking what such 'costs' would be related to. I currently benefit from tax-free home and school fees subsidies. I also pay income tax in France and social taxes in the UK

A couple of years ago I discussed with a partner in a large accountancy firm the question of whether there is a fixed time limit on expat contracts that is tax-related. His view was that the 5-year limit was often imposed by companies as a policy, but that a tax limit does not exist

It looks increasingly likely that the UK company will use this as a negotiation tactic to encourage my repatriation and I would like to be sure of my ground, so any comments or advice would be much appreciated !

Many thanks, Rick8


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## Bevdeforges (Nov 16, 2007)

At least as far as US expats are concerned, the "five year limit" relates to French cotisations (i.e. social insurances), as this is the limit to how long the French government will allow a "temporary" employee from outside France to remain in his "back home" social insurance system.

The cotisations for a French employee cost the employer about 40% of the employee's gross salary - and is said to be one of the highest in Europe. This is very likely what your employer is concerned about.

The government office that your employer should be working with is called DIRECCTE. They are organized by region within France, but I did manage to find an article from the Aquitaine region that might be of interest in your situation: Cadre juridique des prestations de services internationales - Direccte
Cheers,
Bev


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