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Hiring in Reunion
Réunion Island, an overseas department of France, is in the Indian Ocean. Saint Denis is the capital and the largest city of Reunion. French is the official language. The service sector, especially tourism, dominates the economy. Moreover, Rum distillation is an important source of revenue. Reunion’s main trading partners are France, Japan, Luxembourg, Italy, Germany, Madagascar, South Africa and Bahrain. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Reunion’s legal and tax regulations. Réunion is considered a part of France for tax purposes, and the French tax system generally applies, with some modifications and exceptions. Residents are taxed on worldwide income; Non-residents are subject to tax only on Réunion-source income. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Reunion’s Labor Code and tax laws.
statutory labor requirements
Public Holidays
- New Year's Day (1st January)
- Easter Monday (13th April)
- Labor Day (1st May)
- Victory Day (8th May)
- Ascension Day (21st May)
- Whit Monday (1st June)
- National Day (14th July)
- Assumption Day (15th August)
- All Saints' Day (1st November)
- Armistice Day (11th November)
- Abolition Day (20th December)
- Christmas Day (25th December)
13th / 14th Month Pay
- Department of French Department of French
income tax
- Réunion is considered a part of France for tax purposes, and the French tax system generally applies, with some modifications and exceptions.
- Residents are taxed on worldwide income; Non-residents are subject to tax only on Réunion-source income.
- There is no definition of taxable income.
- The most important categories of income are:
-
- Employment income (including income from prior employment)
- Business income
- Agricultural income
- Professional income (income from “non-commercial” activities, e.g. from the legal and medical professions, and income from activities not classified into any other category)
- Income from activities performed by certain managers controlling family companies or limited partnerships
- Income from immovable property
- Investment income (income from movable property)
- Capital gains.
- The rates on ordinary income for resident individuals are progressive from 0% to 45%.
|
Taxable income (EUR) |
Rate |
|
Up to 9 964 |
0% |
|
9 965– 27 519 |
14% |
|
27 520– 73 779 |
30% |
|
73 780 – 156 244 |
41% |
|
Over 156 244 |
45% |
deductible expenses
- Various deductions and allowances are available, based on family circumstances and related to certain types of investment or expense incurred during the year
- Expenses generally are deductible if they are necessary for the generation of business income.
- Allowable expenses generally are those incurred for business purposes and that can be verified.
- Foreign-source losses are not deductible.
- Small and medium-sized enterprises (SMEs) that carry out specific activities in Réunion may benefit from a 50% allowance on taxable income, capped at EUR150 000 (or an 80% allowance capped at EUR300 000 in specific areas).
|
Deductible Expenses |
|
immigration
- Visas are not required by foreigners from the UK, USA, Australia, Canada and other EU countries
- To enter Reunion, passports with 6 months’ validity are required by individuals from the aforementioned nations
- EU nationals only require passports/ID cards to be valid for the duration of the stay
- Nationals from countries that require a visa can apply for a Schengen visa to enter Reunion
- Reunion Island, French overseas department, is not a member of the Schengen area.
- For the holder of Schengen visa, the entrance in overseas departments/territories is possible only if the visa label contains the name of the overseas department/territory destination: "Valid for Reunion Island".
- Chinese, Indian, South African and Mozambique nationals no longer need a visa for stays of up to 15 days.
- The overseas departments of France are generally subjected to the same visa requirements as France
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Schengen Visa |
|
90 days |
|
|
Short Stay Visa |
|
90 days |
|
value added tax
- Réunion operates a VAT system that is similar to the EU system, but with certain adaptations.
- Metropolitan France, the other overseas departments and EU member states are deemed to be export territories with regard to Réunion, in the same way as third countries.
- The following rates are applicable:
- VAT in Reunion Island is 8.5%.
|
VAT |
|
|
Standard Rate |
8.5% |
|
Reduced Rate |
2.1% |
withholding tax
The following table sets out the applicable WHT rates on dividends, interest and royalty payments made to non-residents (the tax is a final tax and the rate may be reduced under an applicable tax treaty):
|
Income |
Rate |
|
Dividends |
0%/30% |
|
Interest |
0% |
|
Royalties |
33.3% |
payments and invoicing
- The tax year is the calendar year
- Married persons file a joint tax return, with no option to file separately after the year of marriage or before divorce
- Income tax returns must be filed in May after the end of the tax year
- Late payments and late filings are subject to a 10% penalty
employee accruals
| Christmas Bonus% |
French department |
| Christmas Bonus Over Vacations % |
French department |
| Severance per Year % |
French department |
| Vacations % | French department |
| Notice % |
French department |
| Christmas Bonus Over Notifications% | French department |
| Vacations Plus% | French department |
| Total percentage of Salary (yearly) | French department |
employer accruals
Additional information (Country Accruals)
| Description | Uses France guidelines |
