France is the largest tourist destination in the world, but it is also a hub of global business expansion and growth. With the 6th largest economy in the world and a sophisticated workforce and infrastructure, France offers companies huge opportunities for international growth.
While France is a great opportunity for growth overseas, there are several challenges to operating a business there. France has unique labor laws and employee protections, as well as high corporate rates and requirements for business communications to be conducted in French. The labor legislation applies to specific industries and sectors of business, so payroll in France can be an issue depending on the type of industry or company.
The labor market has excessive regulations for employers, and one of the world’s most difficult and complex payroll processes. France requires that workers have unemployment contracts that meet local standards are are drafted in the French language. The standard work week is no more than48 hours, but 35 hour weeks are the norm. Taxes must be paid every year on February 28th.
The French government is heavily involved in privatized business. Companies must complete incorporation to register the business as a subsidiary company, branch office, or liaison office. A subsidiary company is the most common entity among foreign investors. Businesses must register with the French Patent and Trademark Office, and publish incorporation approval in the public newspaper.
The tax year ends on December 31st, but extensions are available for online reporting. Tax declarations must be made in May.
The following reports must be submitted:
- Shares & BIK (Benefit in kind): Expenses and reimbursements paid throughout the year need to be reported in the Annual Declaration of Reconciliation of Wage
- Declaration Annuelle des Donnees Sociale (DADS): This is a statement by employers that summarizes the benefits and total salary paid to employees. This must be submitted to the Caisse Régionale d’Assurance Maladie (CRAM)
- Fiche Fiscal/Employee Summary of Earnings: This document is not mandatory to provide to employees, but employers can distribute if they choose to do so
- ASSEDIC – Unemployment Social Security Annual Summary: This report details employee unemployment contributions to USSRAF (expats have to submit reporting to GARP)
- URSSAF – The Social Security Annual Summary: This documentation is submitted to the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales
- Declaration Nominative Annuelle (DNA): The ‘Annual Nomination Statement’ provides the accuracy of wage contributions to benefit schemes. Reports are submitted to MEDERIC
- Gras Savoye: Detailing medical and life assurance contributions, reports must be submitted by the February 28th
Individuals must file by May (extensions are sometimes available for online tax returns). Missing the deadline will result in a fine of 10% of total tax bill.
To grow or expand your business already operating in France, you need a partner who can manage the complex payroll and compliance regulations and the cultural and language differences. Blue Marble Payroll specializes in providing best-in-class payroll in France for multi-national organizations. We give your business the technology and local payroll expertise you need to effectively reduce compliance risks and operate more effectively in France.