At the Council of Ministers meeting on 16 September 2026 the French government endorsed a bill authorising ratification of the 18 February 2026 protocol amending its 1992 tax treaty with India. The update, classified as a priority by Finance Minister Luc Garnier, plugs interpretative loopholes that have long complicated payroll planning for French nationals on assignment in Bengaluru or Mumbai – and for Indian intracompany transferees in Paris. Key changes include a clearer definition of permanent establishment thresholds for short-term consultancy projects, and an article aligning pension and stock-option taxation with current OECD standards. For multinationals such as Capgemini and Safran – both of which rotate hundreds of engineers between the two countries each year – the move promises to reduce double-withholding and the administrative burden of filing for foreign-tax credits in France. The protocol will also allow French social-security certificates to be accepted more readily by Indian authorities, dovetailing with the EU’s upcoming ESSPASS. Tax advisers caution, however, that the treaty must still pass the French Parliament and receive reciprocal approval from New Delhi. Entry into force is unlikely before the 2027 tax year. Companies planning 2027 budgets should nonetheless revisit their assignment cost projections: simulations by Big Four firm PwC suggest potential employer savings of up to 8 % on gross assignment packages once the protocol applies. Mobility managers are advised to update shadow-payroll software and communicate the forthcoming changes to Indian and French assignees to prevent surprise year-end liabilities.
