Portugal vs France: The European Tax League, Edition 4
The European Tax League — a series comparing Portugal's IFICI regime against every major European country. Same rules every time: €500K salary, best available regime, no cherry-picking.
Spoiler: France actually showed up. It just wasn't enough.
After Germany's no-show in Edition 3, France enters the ring with a real regime. The Impatriate Regime — Article 155B of the French Tax Code — has been quietly attracting senior international talent to Paris for years.
This one is closer. But when you put it next to IFICI, the cracks still show.
Round 1: What France brings to the table
France's top income tax rate is 45% — brutal by any measure. But unlike Germany, France recognised the problem and built a solution for relocating talent.
The Impatriate Regime (Article 155B) works like this: qualifying executives recruited from abroad can have a portion of their compensation exempt from French income tax for up to 8 years. The exemption covers the "impatriation premium" and income linked to work performed abroad, subject to caps.
🇫🇷 Paris — Impatriate Regime at a glance:
• 45% top rate — impatriation premium and foreign activity portions exempt, subject to caps of 30% or 50% depending on package structure
• Lasts up to 8 years
• Must be recruited from abroad by a French company — employer tied
• Must not have been French resident in the last 5 years
• Social charges (CSG/CRDS) apply on top of income tax
Two details worth understanding:
It's employer-tied. The regime requires you to be recruited from abroad by a French employer. If you change jobs, you need to re-meet the conditions — though if you do meet them, the regime applies.
The exemption is capped. The maximum exemption is 50% of total compensation. Meaning even in the best case, half your income is still taxed at full French progressive rates, with 45% at the top.
On foreign income: Article 155B also provides 50% exemptions on certain foreign-source passive income — dividends, interest, and capital gains on foreign securities — for qualifying impatriates. Additionally, France's 30% flat rate (PFU) applies to many capital income streams. So France does offer some relief on foreign income, though the structure and conditions differ significantly from Portugal's approach.
Round 2: What Portugal brings to the table
🇵🇹 Lisbon — IFICI at a glance:
• 0% on qualifying foreign income — for 10 years (subject to income structure and applicable treaties)
• 20% flat on Portuguese source income — no matter your salary
• No salary cap on the 20% rate for qualifying income
• 10 years — 25% longer than France's 8 years
• Generally not employer-tied — though qualifying activity and employer type must be maintained
• No general wealth tax (note: high-value real estate is subject to AIMI, Portugal's additional property tax)
The structural differences are significant. Portugal gives you a flat 20% ceiling with no cap on qualifying income, for 10 years, with no employer dependency. France gives you a partial exemption, capped at 50% of compensation, for 8 years, tied to a specific employer.
And on foreign income — while France offers partial relief through the 50% exemption and PFU, Portugal's IFICI exemptions for qualifying foreign income categories can reach 0% — creating a meaningful advantage for founders with substantial foreign-source income structured correctly.
Round 3: The numbers
Illustrative figures based on qualifying employment income under standard assumptions. Individual outcomes depend on income structure, package structure, social charges, personal circumstances, and applicable rules. France figures represent best-case optimised impatriate package.
On a €500K salary:
• Paris (Impatriate Regime): Effective rate ~mid-30s to low-40s%, illustrative take-home ~€300K-€330K, 8 years, employer-tied, 50% exemption + PFU on qualifying foreign categories
• Lisbon (IFICI): 20% flat, illustrative take-home ~€400K+, 10 years, generally portable, 0% on qualifying foreign categories
Illustrative gap: up to ~€100K-€130K per year in favour of Portugal — from day one.
The year 9 problem
France's Impatriate Regime lasts 8 years. After that, full French rates apply — 45% on everything above the threshold, with no relief and no transition.
Portugal's IFICI lasts 10 years. After 8 years in Paris, your Lisbon counterpart still has 2 more years of IFICI running — at 20% flat, with qualifying foreign income still exempt.
Over a 10-year horizon, the cumulative difference is substantial. And in years 9 and 10, when Paris reverts to full rates and Lisbon is still in IFICI, the annual gap widens further.
The verdict
France is the strongest competitor we've seen so far in the series. The Impatriate Regime is a genuine, well-designed incentive that has attracted real talent to Paris.
But 8 years vs 10. Employer-tied vs generally portable. Capped 50% exemption vs flat 20% ceiling. And 0% on qualifying foreign income in Portugal vs partial relief through the French regime.
Portugal wins Edition 4. Closer than Germany or Sweden. But a win.
The running table
# · Country · Take-home on €500K · Regime · Duration · Notes
1 · PORTUGAL · ~€400K+ · IFICI · 10 yrs · 0% on qualifying foreign income
2 · FRANCE · ~€300K–€330K · Impatriate Regime · 8 yrs · 50% exemption cap, employer-tied
3 · NETHERLANDS · ~€330K · 30 Ruling · 5 yrs · €233K salary base cap
4 · SWEDEN · ~€285K–€305K · Expertskatt · 7 yrs · SEK 88,800/mo eligibility floor
5 · GERMANY · ~€262K · No regime · — · Standard progressive PIT
Next match: Portugal vs UK 🇬🇧 — The Non-Dom is dead. What replaced it?
Is IFICI right for you?
IFICI eligibility depends on your professional profile, residency history, income structure, and qualifying activity. The regime is powerful — but it requires proper setup to access the full benefit, and the rules around foreign income exemptions are nuanced and fact-specific.
At Expatico, we help founders and senior hires assess whether they qualify, structure their move to Portugal correctly, and access the full range of Portuguese incentives — from IFICI applications and company incorporation to talent sourcing and grant access.
👉 Register on expatico.eu to find out if you qualify and connect with our team.
📖 Read more editions of The European Tax League at expatico.eu/blog
*All figures are illustrative based on standard assumptions for qualifying employment income. Tax outcomes depend on individual circumstances, income structure, social charges, package structure, applicable treaties, and anti-abuse rules. This is not tax advice — consult a qualified advisor before making relocation decisions.*