OD FLASH | Taxation of anticipated Bonuses: reclassification as extraordinary income but reduced taxation under the impetrate regime

Paris Administrative Court, 1st Section – 2nd Chamber, September 16, 2025, n° 2317762

In a judgment dated September 16, 2025 (n° 2317762), the Paris Administrative Court confirmed the reclassification of bonuses paid in 2018 to a senior executive as exceptional income, thereby excluding them from eligibility of the tax credit for the modernization of tax collection (CIMR). These bonuses, amounting €167,676, had been paid in advance following a change in shareholders, whereas they were initially scheduled to be paid in 2020 and 2021.The tax adjustment issued by the tax authorities was therefore deemed justified.

The court further noted that the official tax simulator provided to taxpayers does not constitute a formal position of the tax administration within the meaning of Article L. 80 B of the French Tax Procedure Code and thus cannot be invoked to dispute the calculation of taxable income.

However, the court recognized that the taxpayer was entitled to benefit from the impatriates’ tax regime provided for in Article 155 B, paragraph 3 of the French General Tax Code. This regime grants employees and executives who have recently taken up employment in France a 50% exemption on their remuneration. The Court held that this exemption also applies to exceptional income, such as the bonuses at issue, thereby reducing the taxable base and cancelling the additional income tax and social contributions assessed for the year 2018.