French Court ends confusion about social charges
Since 2012, non-French residents have had to pay French social charges on sources of income and capital gains from French property.
There has been controversy on the liability of non-residents to pay social charges. This is because it was not clear if social charges are a tax or a social security contribution.
Individuals can be liable to pay tax in countries in which they are not resident, but as non-residents do not benefit from the French social security system, they should not be liable to pay social security contributions in France.
The European Court of Justice has determined the social charges are a social security contribution. This means than non-French residents who contribute to another social security system will not have to pay social charges in France.
As a result, the French government will need to refund charges previously paid by non-residents subject to deadlines for reimbursement applications.
Top Tip: If you may be eligible for a refund, seek advice quickly as deadlines apply. It is no longer possible to claim reimbursement for 2012 social charges.
For advice on Tax matters, please contact David Anderson, Head of International and Cross Border Tax.