In principle, compensation paid for the contractual breach of an employment contract is exempt from French income tax if the employee is not entitled to a pension of a legally binding regime. Certain persons wondered if it was possible to benefit from the exemption if the entitlement right to pension intervened during the same year as the breach of the employment contract.

The French Tax Authorities have specified that the above mentioned exemption is applicable when the liquidation of pension is realized after the date of effective breach of the employment contract (BOI-RSA-CHAMP-20-40-10-30).