In a Law on emergency economic and social measures dated 24 December 2018, the French government has unveiled a package of measures to curb the "yellow jackets" crisis after several weeks of anti-government protest. Among these measures is a non-mandatory new bonus, called the "Exceptional Purchasing Power Bonus".
What is it and can it be implemented in your company?
A non-mandatory tax-free bonus
This one-time purchasing power bonus will be exempt from all social contributions (including CSG/CRDS levies, apprenticeship tax and professional training contribution). It will also be exempt from income tax for its beneficiaries.
The payment of this bonus is non mandatory and relies on the goodwill of companies. However, the bonus may under no circumstances replace salary increases or bonuses provided for in a collective agreement, employment contract or company policy, nor may it replace any items of remuneration.
For the tax exemptions to apply, the following conditions must be met:
The Purchasing Power Bonus can be implemented:
The unilateral decision or the collective agreement shall determine the amount of the bonus and can decide to restrict the scope of beneficiaries and/or modulate its amount.
Bird & Bird will be happy to help you around the assessment or implementation of this bonus.