Do you employ people who have to work far from home or their usual place of work? The“indemnité de grand déplacement” is a special tax system designed to compensate for the additional business expenses incurred as a result of business travel. Understanding the tax system is essential to optimize your social and payroll management, while complying with your reporting obligations.

This mechanism differs from other fringe benefits and professional expenses in its strict conditions of application and precise exemption limits. A thorough understanding of these rules will help you avoid any tax adjustments.

What is the taxable long-distance travel allowance?

The long-distance travel allowance is compensation paid to employees who are obliged to carry out their professional activity in a location far from their usual place of residence and their home establishment. This entails additional expenses for accommodation, meals and transport. This scheme is particularly relevant to certain business sectors: construction, with its itinerant worksites, consulting and auditing for geographically dispersed clients, industrial maintenance on remote sites, and transport and logistics activities.

The tax treatment of this indemnity, governed by article 81-19° of the French General Tax Code and clarified by the BOFiP BOI-RSA-CHAMP-20-50-30, is based on the principle of partial exemption. Amounts paid are exempt from both income tax and social security contributions up to ceilings set annually by the tax authorities. Beyond these thresholds, the excess amount becomes taxable and must be added back to the employee’s income. For example, for an employee on a long-haul trip with accommodation invoiced at 70 euros in the provinces, only 69.50 euros will benefit from the exemption in 2024, with the 0.50 euro difference constituting a taxable salary supplement.

Eligibility for the long-distance travel scheme is conditional on three cumulative criteria being met simultaneously:

1. Employees must work away from their usual place of residence
2. The activity must take place away from the usual workplace
3. This situation must be of a temporary nature

Conditions of application of the long-distance travel scheme

Notion of habitual residence and place of work

Habitual residence corresponds to the tax domicile where you actually reside on a stable basis. The tax authorities look at a number of factors to qualify this residence: the length of time you are actually present (generally more than six months a year), the place where you are taxed for income tax purposes, the address shown on official documents, and the place where your family and economic interests are centered. Your usual place of work is the establishment to which you are contractually attached, as mentioned in your employment contract.

The French tax authorities generally apply a minimum distance of 50 kilometers between the temporary assignment and your home or usual place of business, although this threshold is not set by law but results from administrative doctrine (BOFiP-RSA-BASE-30-50-30). This distance is measured by the shortest practicable road route, not as the crow flies. In practice, some employers apply stricter criteria, setting the threshold at 60 or 70 kilometers. In the case of contentious situations, case law makes a case-by-case examination, taking into account all the factual circumstances.

Temporary nature of the assignment

The temporary nature of an assignment is an essential condition of the long-distance travel scheme. The tax authorities consider an assignment to be temporary for a maximum of 24 months. This period begins on the first day of travel to the site concerned.

After 24 months, the relocation site is considered as the new usual place of work. The indemnities paid are then fully taxable and subject to social security contributions. The employer must cease payment of exempt allowances, or reintegrate them into the contributions base. However, an administrative tolerance exists for slight extensions of a few weeks, provided that the total duration remains close to the threshold and that the extension was not anticipated from the outset.

This period is calculated on an assignment-by-assignment basis. If you carry out a series of projects in sufficiently distant geographical areas (generally more than 50 km between the two sites), each assignment is counted for a further 24 months. On the other hand, if an employee carries out successive or interrupted assignments on the same site or within a restricted geographical area, the tax authorities may consider that this is a single assignment and cumulate the periods.

Exceeding the 24-month time limit without regularization exposes the company to URSSAF and tax reassessments for all indemnities paid beyond this period. Administrative jurisprudence has confirmed this strict position on several occasions, while allowing for exceptional extensions in specific, duly justified situations, notably when unforeseeable circumstances have extended the initially planned duration of the worksite.

Tax and social securityexemption ceilings

Meal allowance limits

Meal allowances paid in connection with long-distance travel are exempt up to a limit of 20.20 euros per meal for 2024. This amount covers a meal taken at the place of travel when you are unable to return home.

You are entitled to two allowances per day: one for lunch and one for dinner. The breakfast allowance remains exempt up to a maximum of 6.90 euros.

Accommodation cost ceilings

For 2024, accommodation costs will be exempted up to a maximum of 69.50 euros per night in the provinces and 89.50 euros in the Paris region. These amounts include all taxes.

The employer can choose between reimbursing actual expenses based on receipts, or paying a lump-sum allowance. In the latter case, the exemption ceilings apply strictly.

Commuting allowances

There is a specific system for reimbursing the cost of kilometers traveled to and from work. You can opt for the tax authorities’ mileage scale, or reimburse actual transportation costs.

For weekly journeys home, the exemption remains valid as long as the frequency remains reasonable, generally one return trip per week.

Meal allowance limits

Employers have two options for compensating meal expenses incurred during long-distance travel. They can pay a flat-rate, tax-exempt allowance of up to 20.20 euros per meal for 2024 (compared with 19.60 euros in 2023), without requiring supporting documentation. Alternatively, it can reimburse actual expenses on presentation of receipts, subject to the same ceiling. These two methods cannot be combined for the same meal. The tax authorities reassess these amounts annually.

Employees are entitled to two meal allowances per day: one for lunch and one for dinner, provided they are unable to return home to eat these meals. The breakfast allowance remains exempt up to a limit of 6.90 euros, but only if this meal is not already included in the price of the overnight stay.

When the employer provides the meal directly, or when it is included in the accommodation package, no additional allowance may be paid. These long-distance allowances can be combined with other schemes, such as luncheon vouchers for days worked at the usual site, but not for the same meals.

Accommodation cost ceilings

For 2024, accommodation costs will be exempted up to a maximum of 69.50 euros per night in the provinces and 89.50 euros in the Paris region. These ceilings apply specifically to Paris and the departments of Hauts-de-Seine (92), Seine-Saint-Denis (93) and Val-de-Marne (94). These amounts include all taxes and breakfast if included in the price of the night.

Employers can opt to reimburse actual expenses on presentation of itemized invoices, or pay a lump-sum allowance without proof. In both cases, tax and social security exemptions are limited to a maximum of €69.50 in the provinces and €89.50 in the Paris region. Invoices must be made out in the employee’s name and detail the services provided (overnight stay, breakfast, tourist tax).

If breakfast is billed separately or not taken by the employee, the specific allowance of €6.90 can be added to the accommodation ceiling. This distinction optimizes the reimbursement of actual expenses incurred.

Additional expenses related to accommodation, such as hotel parking or paid wifi, may also be reimbursed, within reasonable limits and with supporting documents. These ancillary services are assessed on a case-by-case basis, depending on how necessary they are to the mission.

Short-term furnished rentals (Airbnb, tourist residences) are accepted as a form of accommodation, provided there is a valid invoice showing the identity of the employee, the dates of stay and details of the services provided. The employer may pay amounts in excess of the exemption ceilings, but the excess amount becomes taxable and subject to social security contributions.

Commuting allowances

There is a specific system for reimbursing the cost of kilometers traveled to and from work. You can opt for the tax authorities’ mileage scale, or reimburse actual transportation costs.

For weekly journeys home, the exemption remains valid as long as the frequency remains reasonable, generally one return trip per week.

Consequences of exceeding ceilings

Any amount in excess of the exemption ceilings is taxable as salary and wages. It is included in the basis for calculating income tax and social security contributions. Let’s take a concrete example: an employee receives 25 euros per meal for long-distance travel. Of this amount, only 20.20 euros is exempt. The excess 4.80 euros must be added back to the tax base, which increases the employee’s taxable income and may affect his tax bracket.

The employer must then reintegrate these amounts in the annual tax declaration of salaries via the DSN. These amounts will then appear on the employee’s payslip as taxable remuneration, reducing the net amount payable as a result of the applicable tax and social security deductions. Spontaneous regularization before any tax audit avoids penalties and demonstrates your good faith to the tax authorities.

In the event of an URSSAF or tax audit, failure to rectify the situation may result in a reassessment of the social security contributions evaded. This adjustment is accompanied by surcharges ranging from 5% in the case of good faith to 10% in the case of bad faith, or even 25% in the case of fraudulent maneuvers. In addition, late payment interest is charged at a rate of 0.20% per month. URSSAF’s statute of limitations is 3 years, which can be extended to 5 years in the case of concealed work.

Employer’s reporting obligations

The employer must keep all supporting documents attesting to the reality of the trip in an organized manner: dated and signed travel orders, invoices for personal accommodation, restaurant bills or meal receipts, on-site attendance sheets, and any other document attesting to the reality and duration of the trip. These documents must be classified by employee and by period, to facilitate consultation in the event of an audit.

The expense claim is an essential piece of evidence. It must mention the employee’s full identity, the period concerned, the precise destination of the trip, the business reason justifying the mission, as well as the date, place, nature and detailed amount of each expense incurred.

These documents must be kept for six years from the end of the financial year concerned, or ten years if they are incorporated into the company’s accounts. They may be kept in paper or electronic format, provided that the integrity and legibility of the documents are guaranteed. In the event of an URSSAF or DGFIP audit, you must be able to produce all these supporting documents within fifteen days of the request.

In the Déclaration sociale nominative (DSN), use code CTP 039 to declare exempted long-distance travel allowances. Amounts exceeding the ceilings must be declared as taxable remuneration, using the code corresponding to standard gross salaries. This distinction enables URSSAF and DGFIP to check the compliance of the exemptions applied.

Although not legally required, keeping a travel logbook is a recommended practice to ensure optimum traceability. This register centralizes information relating to each assignment: start and end dates, place of assignment, nature of the assignment, and amounts paid. This documentation greatly facilitates controls and demonstrates the seriousness of your administrative management.

Alternatives and complementary devices

For employees who do not meet the conditions for long-distance travel, other mechanisms exist. Business expenses can be deducted under the actual expense system, or via a flat-rate deduction of 10%. The assistance of professional accountants is often necessary to optimize the choice between these two options and secure the reimbursement terms.

Some specific bonuses can also compensate for the constraints associated with professional mobility. However, their tax treatment differs substantially from that of long-distance travel, particularly in terms of the basis for social security contributions and taxation.

Thetax deduction for professional expenses can be applied in certain professions requiring frequent travel, offering an interesting alternative depending on your situation. This system mainly concerns professions whose professional expenses structurally exceed the standard flat-rate deduction.

Tax optimization and legal security

There is sometimes a fine line between tax-free compensation and taxable additional remuneration. An in-depth analysis of your situation is essential to avoid any risk of requalification.

A consistent, documented expense reimbursement policy is your best protection in the event of an audit. Internal procedures must clearly define the methods for allocating and calculating allowances.

Faced with the complexity of the system and the financial stakes involved, the support of a specialized consultant will enable you to secure your practices while optimizing your company’s tax and social charges.