E101 and taxe d’apprentissage
Wednesday, 07 December 2005
“We are liable for taxe d’apprentissage (tax paid by businesses to fund training programmes) in Alsace Moselle (0.2%) and every year we hire foreign artists (with or without an E101). I would like to know if we are liable for this tax in respect of these artists. As far as I am aware, we only have to pay it for artists not in possession of an E101 form (those for whom we pay social security contributions)”.
The taxe d’apprentissage is due by partnerships and single operators whose revenues are liable for tax on business income as well as by firms, organizations and associations liable for corporate income tax.
The territorial scope of the taxe d’apprentissage is the same as that for income tax. Therefore, any employer domiciled in France for tax purposes is liable for the taxe d’apprentissage.
Article 225 of the [French] general tax code lays down the principle whereby the basis for the taxe d’apprentissage is the same as that of social security contributions, subject to exemption of a portion of the wages paid to apprentices.
Nb >The basis for welfare contributions is determined in relation to the total amount paid to workers in exchange for or on the occasion of work done (salaries, gains, pay in lieu of paid leave, bonuses, compensation and any other payments in cash or in kind, etc.)1.
If a French employer engages a foreign artist who can produce an E101 form, he is not required to pay welfare contributions. In view of the aforesaid article of the [French] general tax code, it would appear that in this case the employer is not required to pay the taxe d’apprentissage either.
However, the precise scope of this alignment is not stated and has not been commented on by the tax authority.
For that reason, we suggest you contact your local tax office and seek their opinion on this point.
1 article L242-1 of the social security code
