Income tax and social contribution exemption for voluntary departure payments under a workforce planning (GPEC) agreement

Article 16 of the 2007 Social Security Financing Act allows a collective workforce and skills planning (GPEC) agreement to classify certain jobs as threatened. Voluntary departure payments made to employees holding such jobs are exempt from income tax up to four times the annual social security ceiling (Article 80 duodecies of the General Tax Code) and excluded from the social contribution base, provided that the authorities have not objected to the classification, that the employee has found stable employment and that a monitoring committee has confirmed it. Decree No. 2007-603 of 25 April 2007 (Official Journal of 27 April 2007) designates the prefect as the competent authority and defines stable employment (permanent contract, fixed-term or temporary contract of at least six months, business creation or takeover). The same article makes the part of severance payments above the statutory or contractual amount subject to the CSG.