Starting in January 2019, with the entry into force of the “Withholding Income Tax”1 in France (also known as “Prélèvement à la source” or “PAS”), companies must collect tax at the source (as is the case in almost every country in the world), at the same time as social security contributions, by applying a tax rate communicated by the French tax authorities or the neutral tax rate. all companies that pay salaries to an employee living in France must collect and pay the Withholding Tax whether they are a French or foreign company.

This means that a foreign company which employs a French tax resident must be registered in France to be able to repay social contributions – employer and employee contributions – as well as the PAS collected.

To fulfill their obligations relating to the declaration and payment of social contributions and PAS, the foreign employer should appoint a tax representative, who must be a taxpayer established in France and accredited by the French tax authorities.

What is a tax representative?

The tax representative is an intermediary between the French tax authorities and the foreign employer who employs a salaried employee living in France. Their main task is to ensure the compliance of the foreign employer regarding French tax laws. The tax representative will be personally liable for the reporting and financial obligations normally incumbent on the employer.

Who needs a tax representative?

Under the provisions of the European Directive 2006/112/EC, the obligation to appoint a tax representative in France is mandatory for a foreign company with no permanent establishment in France or in the European Union, who is running taxable transactions in a Member State.

That obligation does not apply to companies established in the European Union or in a European Economic Area (EEA) country. However, they can still appoint a tax agent for convenience reasons.

The role of the tax representative?

The Withholding Income Tax/PAS collected is to be declared each month by submitting:

  • the DSN (Nominative Social Declaration) – on the 5th or 15th of the month following the payment of the salaries OR,
  • the PASRAU (Withholding Income Tax for other income) – when social contributions are not due in France, for example – on the 10th of the month following the payment of the salaries.


To be able to collect and pay the Withholding Income Tax/PAS to the French tax authority, the foreign company must:

  • Be registered2 in France and obtain a tax identification number (SIREN/SIRET)
  • Create a professional account on the French government website “impô”
  • Provide a SEPA account (for the payment of the social contributions and PAS in France)


The tax representative will take care of these obligations for the foreign company.

  • The employee working for the foreign company will therefore be protected against:
  • the risks of illness, maternity, invalidity, death
  • old age risk including supplementary pensions
  • family expenses
  • the risks of accidents at work and occupational diseases
  • the risk of unemployment

The tax representative is the guarantor of tax and compliance of the foreign employer. They are therefore held responsible in the event of non-compliance regarding these obligations, and for declarations made on behalf of the foreign company (including those of which they are not aware of).

1) Withholding Tax does not change the usual rules of income tax calculation. It’s purpose is to avoid the lag of one year in tax payment and allow the taxpayer to pay income tax in the year of revenue’s collection.

2) This registration must be submitted to the Foreign Business Tax Department – Service des Impôts des Entreprises Étrangères (SIEE),

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