UPDATE January 2016: The French government has reintroduced the deeply unpopular 15.5% social charge on property sales by non-residents. The charge was held to be unlawful in the EU case of Ruyter and the French government has accepted that sellers who were forced to pay it in the French tax years 2013 and 2014 must be refunded.
However, as a result of recent amendments to Article 24 of the Loi de financement de la sécurité sociale 2016 the French government claims it can lawfully levy the social charge on all (includes EU residents) sellers of French property from 1st January 2015 onwards. It does not matter that the contract was signed before this date.
It seems inevitable this matter will return to the European Court. This new move will be resented by non-French property owners and is a retrograde step which sends out all the wrong messages. It makes you wonder about the financial state of France’s social security when the government resorts to these extreme measures to raise forced social contributions from foreign investors who cannot benefit in any way.
This content was provided by Sykes Anderson Perry.
The below text was written in response to The Court of Justice of the European Union ruling dated 26 February 2015 and is now void.
Social charges at 15.5% on income and capital gains have finally come to and end for non-French residents.
Sykes Anderson Perry UK and International Solicitors have reported that The Court of Justice of the European Union ruled on the 26 February 2015 that it is illegal under EU law for France to levy social charges on income and gains derived by non-French EU residents from renting or selling their French property. This is because of the widely established EU principle that a resident of a member state has to contribute to the social security system of one member state only.
The ruling had been a suspected outcome since the Advocate General gave his opinion on the matter towards of the end of 2014. It has now been confirmed by the court. This is good news for the many non-residents in France who have been forced to pay social charges.
What Non-Residents can Claim back
Social charges on Rental Income:
If you have received income on a rental property (in France) and you are non-resident (of France) you have until 31 December 2015 to claim but we strongly recommend you make your claim as soon as possible.
To claim back your social charges, you will need to send a letter by tracked recorded delivery (courrier suivi – including receipt of delivery) to the Centre des Impôts des Particuliers Non-résidents, 10 rue du Centre, TSA 10010, F-93465, NOISY-LE-GRAND Cedex. A claim can also be made via your personal space at French tax website www.impots.gouv.fr.
We have put together a template letter you can download below.
If you have recently sold:
If you have sold a property, you should be able to claim back the social charges if you act quickly. New time barring limits on claims have recently been implemented by the French government. You can now only claim up to twelve months from the date of the sale. However, these strict deadlines for submission may be open to legal challenge. Currently they can prevent anyone who sold in 2012 or 2013 from making a claim (if uncontested).
If you have sold within the last year you may want to apply for a claim using this template and sending it to Centre des Impôts des Particuliers Non-résidents, 10 rue du Centre, TSA 10010, F-93465, NOISY-LE-GRAND Cedex.
If you are about to sell:
You should obtain written confirmation from your notaire that there will be no deduction for social charges on your property before signing any document committing to the sell.