Resolution of French social charges: No gain, no pain for ex-pats

House of euros in hands

Finally, on October 20th, 2015, a resolution on the long-running saga of social charges (prélèvements sociaux), which will come as a great relief to many expatriates living in France and many who had sold French property recently and been unfairly “pinged” these charges on their Capital Gains.

The press release from the French Ministry of Finances effectively gives validation to the decision of the European Court of February 26th, 2015, AND that of the French Supreme Court, dated July 27th, 2015, under the provisions of the so-called Arrêt “De Ruyter”, named after the plaintiff who claimed that he should not pay French social charges as he was no burden to the French social security system because he was covered by the equivalent body in another EU country.

The French Ministry of Finance acknowledges that prélèvements sociaux can only be of benefit, as such, to people in the French social security system; in other words, if your Carte vitale is funded by a French caisse rather than one from elsewhere in the EU. You can tell this on your Attestation des droits by the code gestion. If this code is “70”, this indicates that you’re funded by an outside body to France. Such an example could typically be a EU-retired person, who has gained access to the French healthcare service via an S1 Form from his country of origin. Effectively, it will be this country of origin that funds the retired person’s healthcare while in France.

The dates for which one can make a claim are anything from January 1st, 2013, and this needs to be addressed with supporting documentation (proof of another EU country’s social security cover and/or fiscal residency) to the tax office in France on which you depend. Postal claims should be sent recorded delivery, while email is perfectly acceptable or via the www.impots.gouv.fr website in your personal account under the section “Reclamer”.

Of course, this huge loss of tax revenue (something in the order of €800 million) will need to be compensated for elsewhere, so one expects the whole notion of social tax to be abandoned and henceforth all tax just to be called income or Capital Gains tax. Moves are already under way for this to be effective by 2017, so enjoy the break while you can!