15 May Tax Alert – May 2019 – Claim to be introduced by non-French tax residents
Claim to be introduced by non-French tax residents who have paid social security contributions on French source real estate income and capital gains
French source real estate income and capital gains received by non-residents are subject to French social security contributions.
For the record, the social security contributions’ rate applicable to non-French tax residents was 15.5% until December 31st, 2017, then 17.2% until December 31st, 2018. It should be noted that since January 1st, 2019, persons benefiting from a social security protection in an EEA Member State (European Union, Iceland, Norway, Liechtenstein) or Switzerland are exempt from the CSG and the CRDS and are only liable for the solidarity contribution (at a rate of 7.5%). In other situations, the social security contributions owed by non-French tax residents on their French source real estate income and capital gains are due at the rate of 17.2%.
In its « De Ruyter » decision of February 26th, 2015, the Court of Justice of the European Union (« ECJ ») ruled that France could not subject to social security contributions property income of persons who are affiliated to a social security scheme in another State.
Following this decision, in the 2016 social security financing Act, the French legislator has reallocated revenues generated by social security contributions to the Fonds de Solidarité Vieillesse (« FSV »), the Caisse d’Amortissement de la Dette Sociale (« CADES ») and/or the Caisse Nationale de Solidarité pour l’Autonomie (« CNSA »).
The ECJ, in a decision dated March 14th, 2019 (case C-372/18), as well as the French administrative supreme Court in a decision dated April 16th, 2019 (n°423586), open up opportunities for persons affiliated to a social security scheme in an EEA member state or Switzerland, who wish to claim for the reimbursement of social security contributions paid in France on their French source capital gains and on their French source real estate income for the years 2016, 2017 and 2018 (except the 2% solidarity contribution for 2018).
La Tour International, law firm, remains at your disposal to assist you in this procedure, which must be performed before December 31st, 2019, through a litigation claim.
Any request must of course be subject to a prior examination concerning the tax situation in France of the person concerned.
We remain at your disposal for any questions you may have and to assist your clients in this request.