A recent ruling means that certain French taxpayers are in a position to reclaim social contributions\u00a0(pr\u00e9l\u00e8vements sociaux) paid after 1 January 2016. The taxpayer\u2019s arguments, initially rejected by the\u00a0tax authorities, were upheld by the local Tribunal Administratif (Strasbourg) and subsequently\u00a0partially upheld at the Cour d\u2019Appel Administratif (Nancy) level, on the same basis as for the refund of\u00a0social contributions paid prior to that date. This was widely known as the \u201cDe Ruyter ruling\u201d, which\u00a0provided solid arguments for successful reclaims for many of our clients.<\/p>\n
After 1 January 2016, it was theoretically impossible to obtain refunds using the De Ruyter ruling as a\u00a0result of changes made to the French Social Security Code. These changes were intended to redefine\u00a0social contributions as \u201ctaxes\u201d, and not \u201csocial security charges\u201d. This was achieved by re-allocating\u00a0these social contributions to three non-contributory funds.<\/p>\n
In the most recent case, a Swiss national was able to challenge that the social contributions paid in\u00a02016 on his 2015 purchased annuities were still used to finance the French social security system by\u00a0repaying public debt and subsidising solidarity funds for old age persons. He argued that he should\u00a0not be subject to such contributions as he had been making regular payments of national insurance in\u00a0Switzerland.<\/p>\n
EU Regulation n\u00b01408\/71 provides that a citizen cannot be subject to social security contributions,\u00a0including those allocated to non-contributory funds, in more than one EU state. It should be noted that\u00a0Switzerland has an agreement with the EU regarding social security and the same EU law applies even\u00a0though Switzerland is not an EU member. The French court of Nancy agreed with his arguments.<\/p>\n
A new decision from the Conseil d\u2019Etat<\/em>, who may in turn refer to the ECJ, is now pending.\u00a0Meanwhile, taxpayers have the green light for new refund claims.<\/p>\n Non-residents living in another EU\/EEA country, who pay social contributions on French property\u00a0income and gains, are concerned. It is also the case of French residents benefitting from healthcare in\u00a0France based on social security contributions made in another EU country, who pay social\u00a0contributions on their investment income and gains. For example, a French-resident in receipt of a UK\u00a0state pension or working in another EU country and in possession of a S1 form.<\/p>\n Recent case-law is of no assistance for those who cannot justify affiliation with another EU\/EEA\u00a0social security regime, such as tax-payers benefitting from full private medical insurance, those living\u00a0in third countries outside the EU\/EEA, or officials and servants covered by an international\u00a0organization social security regime (except those of the EU). Although one can question the\u00a0application of French social contributions to such tax payers, who are not a charge to the French social\u00a0security regime, the prospect of a successful refund claim is still remote.<\/p>\n On the other hand, early retirees receiving healthcare under a PUMA residence scheme, workers (selfemployed\u00a0or salaried) carrying out their activity in France or pensioners in receipt of a French state\u00a0pension, even if it is a trivial pension, are all affiliated with a French social security regime.\u00a0Consequently they are definitely not in a position to submit a claim.<\/p>\n Contributions paid on French-source property income by non-residents<\/strong> of France:<\/p>\n For French residents<\/strong>, a non-exhaustive list of income concerned:<\/p>\n 1 \/ Social contributions paid at source on:<\/p>\n 2\/ Social contributions paid via an avis d\u2019imposition on previous year\u2019s declared income:<\/p>\n You only have two years to appeal following the payment of the contributions. The deadline for the\u00a0submission of a reclaim for social contributions paid in 2016 is therefore 31 December 2018. This\u00a0covers 2015 income, which was assessed in 2016, as well as social contributions withheld at source\u00a0during 2016. After this date, no appeal will be permitted for the year 2016, even in case of a favorable\u00a0judgment from the ECJ forcing the French tax authorities to reimburse all those who can prove they\u00a0were eligible for refunds.<\/p>\n The reclaim for all three years (2016, 2017 and 2018) can be made by registered letter or online, via\u00a0the impots.gouv messagerie s\u00e9curis\u00e9e<\/em>, with the necessary arguments, proof of social contributions paid\u00a0and supporting documents proving that the taxpayer was subject to the social security legislation of\u00a0another EU\/EEA country for the years concerned. These will essentially be the same documents as\u00a0provided for the De Ruyter reclaims, but covering a different period. It is preferable to file separate\u00a0claims for refund of social contributions paid at source as they are processed by a different tax service.<\/p>\n It should be noted that, even three years on from the De Ruyter ruling, there are still claims waiting to\u00a0be processed by the tax authorities due to the high volume and complexity in certain cases.\u00a0We point out that there is no absolute guarantee of success and a claim may take several years to be\u00a0processed. Failure to answer requests for additional documents in good time may lead to automatic\u00a0refusal of a claim. A unsuccessful claim may also be re-processed with the help of the conciliateur<\/em>\u00a0fiscal<\/em> in the light of a new court decision, provided it was submitted before the deadline. Patience and\u00a0responsiveness are required for a successful reclaim.<\/p>\n","protected":false},"excerpt":{"rendered":" Outline of the case and new ruling A recent ruling means that certain French taxpayers are in a position to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-153","post","type-post","status-publish","format-standard","hentry","category-information-sheets"],"acf":[],"yoast_head":"\nWhich taxpayers are concerned?<\/h2>\n
Contributions made on which income can be reclaimed?<\/h2>\n
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\npayment at source.<\/li>\n<\/ul>\nWhat does the taxpayer have to do next?<\/h2>\n