OFII reminders and employer tax: key takeaways
Several companies are currently receiving payment reminders from the OFII (French Office for Immigration and Integration) regarding the hiring of foreign workers before 2023. In this context, and regarding the changes in legislation, we remind you of the legal framework and reporting obligations related to this tax.
An employer who hires a foreign worker or hosts a posted worker must pay the tax owed by employers of foreign workers to the General Directorate of Public Finance (DGFiP). As we mentioned in this article, the management of this tax was transferred from the OFII to the DGFiP since January the 1st, 2023.
According to the conditions of article L. 436-10 of the CESEDA, this tax is due upon the first admission to France of a third-country national (outside the EU, EEA, and Switzerland) for professional activity. The generating event for this tax is the issuance of a visa for the employment contract by the administrative authority or the issuance of a work permit. Therefore, this primarily applies to workers holding a residence permit under the status of “employee” or “temporary worker.”
Exemptions:
Since the 2023 Finance Law took effect, employers are exempt to pay this tax for foreign workers who hold a residence permit that serves as a work permit. Employers who have hired employees under the “Talent”, “ICT-Posted Worker”, “Student”, “Private and Family Life” statuses, or who hold a resident card, are exempt from this tax.
The tax is not due upon renewal of a residence permit, it is only applicable to the first admission to France.
Procedure:
Employers must declare and pay this tax annually on their VAT declaration, in accordance with their specific tax regime. It becomes due at the end of the month in which the foreign worker begins work.
Standard Tax Regime: The declaration is filed online in the Tax Authority’s professional section, using Form 3310 A-SD (line 61). The amount must then be carried over to line 29 of the VAT return.
Simplified Tax Regime: companies subject to the simplified VAT regime (particularly those reporting less than 15,000 euros in VAT per year) must file the tax electronically in the year of hiring by completing Form 3517-S-SD, on line 45.
Rule regarding VAT credits: Even if a VAT credit appears on your declaration, the tax on foreign labor must be paid. It cannot be deducted from the credit balance.
Tax amount:
The amount of the tax varies depending on the duration of the employment contract and the foreign worker’s salary.
- Contract of 12 months or more: The tax amount is equal to 55% of the worker’s monthly gross salary, up to a maximum of 2.5 times the SMIC (French minimum wage).
- Contracts longer than 3 months but shorter than 12 months: the tax amount is:
- €74 if the monthly gross salary is less than or equal to the full-time monthly SMIC;
- €210 if the monthly gross salary is between the full-time monthly SMIC and 1.5 times that amount;
- €300 if the gross monthly salary exceeds 1.5 times that amount.
The tax authorities provide employers with a guide to help calculate the tax amount.
What about hires before 2023?
The OFII recently sent out payment notices for this tax to several companies regarding the hiring of foreign workers under the “Talent,” “ICT Posted Worker", or “Employee” statuses before 2023. The provisions of the 2023 Finance Law introducing exemptions are not retroactive: as a result, hires made before January 1st, 2023, remain subject to the tax regime in effect as of that date. It is therefore important for companies to verify the information regarding the worker in question (their immigration status, hire date, and the amount claimed), and then conduct an internal review to confirm whether the tax had already been paid to provide proof to the OFII. When the tax has not been paid and is due, we recommend settling the matter as soon as possible, as payment must be made within 30 days of the date the notice was issued.
Our Immigration Department is available to answer any questions you may have regarding the application of this tax.
Sources:
Taxe due par les employeurs de main d’œuvre étrangère | impots.gouv.fr in french
