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Business Travel Allowances for Employees in France

A frequent question asked by our clients is how business travel expenses vary in other countries where employees are held to local tax rules.  For example, one of our clients had an employee on assignment in France who traveled for work on occasion to China.  He wanted to know how much of a travel allowance he was entitled to under French rules, without incurring any personal tax.

Fringe Benefits in France

We responded by first explaining the laws surrounding all fringe benefits in France.  The key is to understand that any employee expense that is not 100% business related would be a taxable fringe benefit.

In this case, if the travel expense or allowance was excessive (such as spending too much on hotels or meals) then the extra amount would be taxable as income.

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Travel Expense Allowance in France

The next question is how do you know what is the non-taxable allowed expense amount?  There is a unique way this is calculated in France and it will depend on the country that the employee is traveling to, in this case China.

Our local partner in France contacted the employee and explained exactly how to find the allowance for China:

  1. Go to the Ministry of Finance website
  2. Select the country of travel (China)
  3. The site displays a daily travel allowance rate of RMB1700 (US$250), which includes meals and accommodation
  4. There are a few caveats to the travel allowance amount:
    – If accommodation is provided, the allowance is reduced by 65%
    – If lunch or dinner is provided, the allowance is reduced by 17.5% each
    – If all meals and accommodation are provided, the allowance is zero.

Any amounts over the allowance, are a taxable fringe benefit to the employee. 

The Shield GEO Solution

If you are employing workers abroad, knowing the ins and outs of local tax rules is essential, but how do you find up to date and accurate information?  Often, the exact rules are on a government website in the local language (i.e. French), and you have to overcome that as well.

Our in country experts help our clients with the hurdles of international employment, just like knowing French travel allowances.  If you don’t have the correct information, your employee could end up with a higher tax bill than planned, or the company may have make up for the loss.

Would you like to avoid all compliance, tax and regulatory problems when sending your staff on foreign assignment?  If so, we can be your ongoing resource to handle every part of international employment: immigration, running payroll and calculating the correct tax and contributions required. 

Our local employer of record is already in place, so you don’t even have to set up any kind of business entity to employ your workers.  We make international employment simple for our clients in over 90 countries.

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Looking to hire an employee in France? Get in touch.

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