An agreement between France and Switzerland allows several large French groups to avoid social security contributions

Thanks to an agreement between Switzerland and France, around twenty large French companies affiliate their high-level executives in Switzerland, which allows them to avoid social contributions, reports franceinfo this Thursday, after consulting a report from Igas and the General Inspectorate of Finance, dated October 2024. This legal practice causes the public accounts to lose 300 million euros. and the government is considering withdrawing from this arrangement.

According to a regulation between France and Switzerland dating from 2009, an administrative arrangement allows large international French groups to benefit from an advantageous exemption regime. They have the possibility to send their executives to a subsidiary established in Switzerland, while having them work in France. These workers are thus affiliated to Lamal, the Swiss social system, which allows these groups to pay less social contributions.

Executives paid more than 500,000 euros per year

Around twenty large French groups use this system such as Total gestion international SA, Renault Nissan Global management SA, and Michelin Global Mobility SA. The process only concerns a few employees, nearly 4,500 between 2016 and 2022. These are executives paid more than 500,000 euros annuallywho occupy “functions related to the development of an international career” and who officially can benefit from this exemption for 6 years.

If the approach is not illegal, the government, in search of money, is looking into the subject because it estimates that nearly 300 million euros escape public accounts each year because of this regulation, (4 billion in total, in 15 years). According to information from franceinfo, a few days ago, the Social Security department was given the green light to take action on these derogatory practices.