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How is France’s ‘talent passport’ affected by new language rules?

People working in highly-skilled sectors are often eligible for a multi-year 'talent passport' residency card in France - here's how they will be affected by changes in France's new immigration law.

Published: 5 February 2024 15:12 CET

How is France's 'talent passport' affected by new language rules?

TO GO WITH AFP STORY A researcher looks at a sample in France (Photo by MEHDI FEDOUACH / AFP)

The ‘Talent Passport’ visa was first introduced as an immigration track for certain highly-skilled sectors including scientific researchers and artists. However in recent years it has been expanded to cover groups including high-paid workers and foreign investors, as well as people with an international reputation in their field.

The visa is attractive – as intended, since its aim is to lure certain valuable workers to France – and it includes going straight onto a four-year carte de séjour for the visa holder and their family members.

France recently promulgated its new immigration law, which created new language requirements for many foreigners applying for multi-year cards and citizenship.

One of the main changes will affect those making their first application for a carte de séjour pluriannuelle (multi-year card, with a max duration of four years). They will now need to demonstrate a French level of at least A2 according to the DELF/ CERL international language scale.

This has left many wondering whether the new rules will apply to the ‘talent passport’ category, which offers a wide range of multi-year residency permits under the title pluriannuelle.

Will ‘talent’ cards be affected?

The short answer is that people with ‘talent passport’ statuses will be exempt from several of the changes to be brought in under the immigration law.

In many cases, people coming to France on a talent passport visa (and their family members) are issued with a four-year carte de séjour straight away, with no requirement to take a language test. This will not change.

When the time comes to renew the card, you can renew it for another four-year ‘talent passport’ carte de séjour, provided you still meet the conditions (eg salary, type of work). There are no plans to make a language test required for the renewal either.

Nevertheless, people with the ‘talent passport’ will still be held to new language requirements if they decide to apply for either the 10-year carte de résident or for French citizenship.

For the 10-year carte de résident, the language requirement has been raised to B1, and for naturalisation, the requirement has been increased to B2.

Whether people on the talent passport card decide to move to the 10-year card is entirely a matter of personal choice.

A section of the new law that limits the number of times cards can be renewed specifically excludes the talent passport. Holders of this card can, therefore, simply keep renewing every four years for the entire duration of their stay in France, even if that stay ends up lasting decades.

But my talent passport carte de séjour says ‘pluriannuelle’ on it?

Yes – by definition, a card that lasts more than one year is pluriannuelle (multi-year), but the new law offers an exemption for people with talent passport statuses.

The clause that adds in the A2 requirement for first-time applications for pluriannuelle cards says that the new language rule “does not apply to foreign nationals exempt from signing a republican integration contract (contrat d’intégration républicaine).”

This refers to the groups of people who will not be called up by OFII to take civics or language courses, which includes anyone falling under the ‘talent passport’ category, as well as their family members and posted workers.

What else are talent passport holders exempt from?

The immigration law also includes changes to OFII civics courses, such as the addition of a test at the end of the class.

While these changes will affect holders of other multi-year cards, like those with the status of salarié (employee), they will not apply to those with talent passport status.

Talent passport holders will remain exempt from the requirement to take civics and language courses offered by OFII – you can see the groups currently are required to take OFII civics and language courses (for the ‘republican integration contract’) here.

Similarly, those under the talent passport category will also be exempt from another portion of the immigration law – a clause (Article 21) which states “there cannot be more than three consecutive renewals of a temporary residence card bearing an identical mention (title).”

This will effectively force some groups of people to either switch onto a pluriannuelle card or a carte de résidence.

Talent passport holders are specifically excluded from this requirement, meaning they can continue to renew this status without limit as long as they continue to meet the original requirements.

Who qualifies for the talent passport?

There are multiple different categories, including people considered ‘qualified or highly qualified employees’ – such as researchers, those working for ‘new innovative enterprises’, and posted workers.

Several of these are subject to minimum income and education requirements.

The category also encompasses certain self-employed people, including those starting businesses in France or making direct economic investments, as well as those working in France ‘with international reputation’, plus some artists and performers.

The new immigration law was also meant to streamline some of the application processes, particularly for highly skilled employees, as well as creating a new category to help foreign healthcare workers move to France for work.

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Are Australian pensions taxed in France?

The situation for Australians can be particularly confusing, largely due to the fact that Australia and France do not have a bilateral social security agreement (though there is an income tax treaty).

Before going any further, it is worth noting that this article is meant to give an overview of the pensions situation for those with Australian pensions in France. It does not replace professional financial advice, and Australians looking to retire in France should seek out expert financial assistance before making any decisions about their pension.

The first step is to determine whether or not you are a tax resident in France (you can look through our guide). All tax residents must fill out a yearly tax declaration, and they must report all global income, even if it is not subject to tax in France.

Where is my pension taxed?

As for pensions, let’s start off with the basics – if you receive a civil service pension from the government of Australia – meaning you were a federal or state public worker, then that pension is only taxed in Australia and it will not be taxable in France, though you will have to declare it along with all global income, although this could count towards your household income which can push you into a higher tax bracket.

As for all other pensions – these are considered taxable in France.

If you have a pension from another country besides Australia, different rules may apply based on that country’s bilateral tax treaty with France. Here is the situation for British, American, and Canadian pensions, and here is an overview of the system.

Age pension

There is a big catch for Australians – the lack of a social security agreement means that Australians living in France may not be able to claim their Age Pension (assuming they qualify based on income constraints).

While you can be an Australian living in Austria, Belgium, Chile, Croatia, the Czech Republic, Spain or Estonia, among others, and still claim your Age Pension, this is not the case in France.

What’s crucial here is when you move – if you start receiving your old-age pension and then you move to France, then you may be able to continue claiming the pension. If, however, you move to France before you reach pension age, then you will not be able to claim it unless you move back.

A spokesperson for the Australian government told The Local in a previous interview: “To be eligible for Age Pension, a person must generally be an Australian resident and be in Australia at the time the claim is lodged, or in a country with which there is an International Social Security Agreement in place.”

There is no such agreement with France. And, despite the efforts of some of the thousands of Australians living in France to get politicians in both countries to act, there appears to be little urgency to change the situation, which means it could be some time yet before we are able to give you any good news on the pension front.

There are groups pushing for a social security agreement, such as the Facebook group ‘Australian Pensions in France’, which can also be a helpful place to connect with other Australians navigating tax complexities between the two countries.

What about superannuation plans?

The next complex area is the ‘superannuation’. While withdrawals from a ‘super’ can be accessed after becoming a resident in France, there are tax implications to be aware of.

The Local spoke with Martine Joly, chartered accountant and tax agent from Bilateral Solutions, who has experience working in both the Australian and French tax systems.

Joly explained that the challenge is that “the two systems are totally opposite. In Australia, pensions are done by capitalisation, with your employer paying into the superannuation.”

In Australia, the contributions were taxed when being deposited, so they are meant to be tax-free upon distribution.

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However, France does not recognise this, so ‘super’ withdrawals are subject to tax here, even though in theory they have already been taxed in Australia.

To make matters more complicated, there are several different ways superannuation plans can be organised, but for the most part French fiscal authorities treat them as trusts.

This means that you may have additional reporting requirements each year, in addition to your annual French tax declaration, such as the “FORMULAIRE N°2181-TRUST2” which asks for the market value, as well as any accrued income, of the trust as of January 1st of that year.

If you are required to do this, then you will also have to name other people listed in the trust – whether they are ‘moral’ or ‘physical’ people. You will be required to give extensive information, including their dates of birth and addresses.

On top of that, you would also have to fill out an additional “event” declaration if a trust is created, modified or terminated. This must be done within one month of the event. This tax form is also available on the government tax site: FORMULAIRE N°2181-TRUST1.

How much can I expect to pay?

You will begin to be taxed when you start withdrawing from your super, and the way you are taxed will depend on whether you take payments in the form of an ‘income stream’ (periodic payments) or as a lump sum.

If you take your super as an income stream, even though it is meant to be tax-free in Australia, you will still owe tax in France once it begins to be distributed. You would be charged at the progressive marginal (barème) rate for income tax, going all the way up to 45 percent (for the highest earners only).

If you try to avoid paying, be aware that “Australia will inform France”, as Joly explained.

“They communicate well and it will not be lost. So the French will realise if you have not paid any tax, because it is fully taxable in France. You have to declare this pension income,” she said.

As for lump sum payments, whether or not you will owe tax in France depends on when you placed the super into your bank account.

“If you convert the super into a bank account prior to leaving Australia and becoming a tax resident in France, then this is not an income, it is a saving,” Joly said.

As such, you would not owe income tax on it, but you would still need to declare the foreign bank account to French tax authorities.

If you take your lump sum super after moving to France and becoming a tax resident, then you would owe tax here upon distribution.

Beware that lump sums are complex and you should get financial advice before making this decision. Technically, French tax authorities may allow a return of once off pension capital to be taxed at a flat rate of 7.5 percent.

But in reality, anyone seeking to do this would need the express, written confirmation from French tax authorities that this rate will be applied. Similarly, you should be aware that this likely will not be possible if you have already begun drawing from your ‘super’, as the flat rate is often only available if the full amount is taken at once. Again, individual professional advice is highly recommended.

You can also find more information at the French tax website Impots.Gouv.Fr.

Joly pointed out a few other things Australians in France should be aware of – including the possibility you may owe the IFI (Impôt sur la fortune, or wealth tax) which considers whether you have property valued at €1.3 million or above.

“Due to high real estate prices in Australia, people just owning a small apartment in Sydney may not realise they would owe tax on this in France later on,” she said.

You should also keep in mind that Australia’s tax year runs on a different calendar year. France considers the period from January 1st to December 31st, while Australia looks at July 1st to June 30th.

This may make a difference when considering your tax residency.

What about social charges?

Deductions in France come in two types – impôts (taxes) and prélèvements sociaux (social charges).

Australians have reported receiving social charges, in addition to taxes, for their superannuation income. That being said, there are several exemptions to social charges.

For example, if you are not working and your spouse is a recipient of an EU/EEA/UK pension (with an S1 form), then both of you would be exempt from paying the CSM health charge.

As the situation for Australians can be more complicated than nationals of other countries, it is highly recommended to seek expert assistance, particularly from someone who has qualifications in both countries and understands the tax treaty.

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