Court orders refund over non-resident social charges

People who have had social charges levied on income from property and investments despite not being affiliated to the French social security system (notably, because they do not live in France) are again being advised to apply for refunds after a new court ruling.

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This applies to non-residents who rent out property in France or potentially to those who have recently sold a French property.

Readers may recall how refunds were made to ‘unaffiliated’ people with regard to levies in 2012-2015 which amounted to 13.5-15.5% of relevant incomes (consisting of Contribution Sociale Généralisée (CSG), Contribution au Rembour­sement de la Dette Sociale (CRDS) and several others). It came after the European Court of Justice (ECJ), con­firmed by top French administrative court the Conseil d’Etat, said France should not have levied these charges.

The ECJ case related to a French resident who worked abroad and was subject to another country’s social security system. However its impact extended to residents in other EU countries with property income/s from France as well as expat pensioners in France whose healthcare was paid by the home country under the EU’s S1 scheme.

The courts essentially said those not linked to the French social security system should not have had not to pay ‘social’ charges which help fund it.

As of the calendar year 2016, however, France decreed that it was no longer using the proceeds for social security and continued the levies.

Now an appeal court in Nancy (cour administrative d’appel de Nancy) has confirmed a lower court judgment that the charges were still linked to social security.

The court ruled in favour of a couple who had contested having to pay charges on investment incomes from 2015 (levied in 2016). For the majority of the 15.5% levy the court ruled without hesitation, however it decided to refer a question for clarification to the ECJ on one part (1.45% of taxable income).

Avocat (lawyer) Clint Goffin van Aken from Stras­bourg, who specialises in this domain, said the government is likely to appeal to the Conseil d’Etat.

However he advised that those affected apply now for refunds of the full 15.5%. This is because claims are time-limited to the end of the year two years after the year when the charges were levied. ie. the end of 2018 for charges you paid in 2016 on incomes from 2015 (eg. money from shares or rental income) or charges paid in 2016 on property sale capital gains.

He added that British people should in particular apply as soon as possible including for levies paid in 2017 or 2018 saying they are much more likely to succeed if they apply before Brexit while still EU citizens.

As of January 2018 the charges rose to 17.2%, meaning if as a non-resident you sold a property in January this year and made a capital gain (after deductions) of €100,000, up to €17,200 may be reimbursable. The exact amount depends on how long you have owned the property for as there are reductions linked to this.

Previously the government did not accept liability to pay refunds to non-residents in countries outside the EU.

Claims can be made individually or with help from a lawyer, some of whom have a particular interest in this area (search online for remboursement CSG avocat).

You can make a claim to your tax office (this is the Service des impôts des particuliers non-résidents in Noisy-le-Grand for UK residents with French incomes) or to the one where the property was located where a capital gain is concerned. Apply based on the Nancy appeal court judgement of May 31, 2018 in the affair of M. et Mme B...A... State the amount of charges you want refunded and provide copies of documents proving the levies (eg. the avis d’imposition for levies on rents, or your capital gains declaration 2048-IMM).

You should also give proof of having been affiliated in another country, eg. that you have been paying National Insurance in the UK; the DWP could advise (if you are a UK pensioner in France, a copy of an S1 form would be suitable).

Another lawyer, Eve d’Onorio di Méo from Marseille, confirmed that the case gives good grounds for a claim with regard to charges levied since 2016.

“This is new. You should make use of the same arguments as the Nancy court, that the charges remain of a ‘contributive’ kind [contributions contributives] as they come under regulation 883/2004 of the European Parliament and the Council of April 29, 2004. “The same applies as in the [earlier] De Ruyter case: one should not pay a tax for which one obtains no benefit.”

The government previously gave advice on claiming refunds at