CSG CRDS (French social charges) is for sure the most unpopular tax in France, not just for British people but also for French! Yes, even worse than VAT. We call it the weed, because like weeds, it grows everywhere, and you can’t get rid of it!
However, The French government were condemned in February 2015 by the European Court of Justice for taking social charges from people who are benefiting from another health system than the French one. People did claim it back and got it back until 2016 when the French government changed the rules and said it did not apply to health system anymore. Well, guess what! Someone took them to court again and the French government lost again so you can claim again! Note that the French government is appealing the court decision but it is advisable to claim now anyway.
- What is CSG CRDS: La “Contribution Sociale Généralisée et la Contribution pour le Remboursement de la Dette Sociale” was created in 1991 to help finance the French health system (which is in debt). In 1991, the social charges were 1.1%. Successive governments (and there have been a few!!) have increased this tax so now it is up to 17.2%!!This tax is taken from revenues from rental income, pension, salaries, capital gain, interests, etc and the % of the tax can differ depending on what revenue is taxed. Finally, there is also a discount and exemption depending on your total income.
- European Court of Justice Ruling: The ruling came after a Non resident (I actually think it was French) complained of being taxed social charges on the interest of an Assurance Vie (it’s a savings account) he had kept in France while he was living and working abroad (Belgium in this case). He was therefore contributing to two health system. The one in Belgium where he worked and lived via his salary contribution and the one in France via social charges. The European Court of Justice agreed with him by saying that the CSG CRDS was a tax financing the French health system and therefore it is wrong to pay twice (contribution in both countries) for something you only get once. On the 31st of May 2018 the “Cour d’Appel administrative de Nancy” has decided that this new law did not change anything and that it is still going towards the health system. Please note that the French government has appealed this decision to the “Conseil d’Etat” and it could take years before there is a final decision.
- Who can claim social charges back: First and foremost, non French residents(but European citizens) who have revenues in France from rented properties in France, investment in France, etc. or who have been charged Social charges on the capital gained on the sale of a holiday property (you can get the social charges back not the capital gain tax!).
But more importantly, French residents of European nationality who are in receipt of an S1 and have been charged social charges. Many of you are in receipt of your state pension (old age pension) and you are in the French health system via an S1 form which was sent to you by your government health department (Newcastle for the British). That means that any expenses with the French health system is covered by your S1; meaning reimbursed to the French health system by the country who issued the S1. So, if you have been taxed social charges on any revenues, you can claim it back! Your claim can go back 3 years.
So, in plain English, if you are a UK pensioner who got charged social charges on UK investment in the last 3 years, you can get it back.
- How do you claim it back: Quite easy really, just write a letter to your tax office alongside a copy of your S1 and copies of your “Avis d’imposition” (tax bill) showing the social charges taken. Send the letter by registered mail and make sure you keep a copy of everything.
As I am very nice and I know that most of you are not bilingual, here is an example of the letter you should write to get social charges taken from interest on investment back:
« Madame, Monsieur,
Nous venons par la présente demander le remboursement des contributions sociales que nous avons payées sur nos revenus de placement pour les années X, X et X (voir photocopies).
En effet, en accord avec la décision du Conseil d’État N° 365511 Extraite de l’alinéa 3 :
« Ne peuvent être assujetties à des contributions relevant du champ d’application du règlement n° 1408/71 les personnes qui résident en France mais qui ne relèvent pas du régime français de sécurité sociale «
Par un arrêt du 31 mai 2018, la Cour d’Appel administrative de Nancy a décidé que la nouvelle affectation de la CSG-CRDS au Fonds de solidarité vieillesse revêtait bien un caractère contributif et s’apparentait à un prélèvement social. Cette décision ouvre la voie au droit à remboursement sur les prélèvements indus depuis 2016.
Nous n’aurions pas dû être assujettis à ces contributions car nous sommes couverts par le régime social Britannique via une S1.
Au vu de tout ce qui précède, il vous est demandé le dégrèvement des prélèvements sociaux litigieux, et la restitution de la somme de XXX €.
Dans l’attente de votre réponse positive, veuillez recevoir mes salutations les plus sincères. »
If you did not keep a copy of your S1, phone CPAM or Newcastle and they will send you a copy. Note that if you are married, the French tax office will want to see the two S1.
- What now: Because the French government has appealed, you probably won’t get a reimbursement yet so why do it now I hear you say?? Well, because you can only go back 3 years on claiming back money from the Tax office (and vis versa). If the appeal takes two years, you won’t be able to claim back for year 2016 and 2017 but also because you might not be a European citizen after 2019!! Due to a small issue called Brexit! So, do it now and keep your fingers crossed.
Conclusion: I am not sure about the outcome as the French government has appealed so please let me know how you get on!! And feel free to contact me when you have some needs on insurances or investment!! Especially if you get loads of money reimbursed thanks to me!
And remember to check out our web site www.bh-assurances.fr/en for all my previous articles (“practical information”) and register to receive our monthly Newsletter. You can also follow us on Facebook: “Allianz Jacques Boulesteix et Romain Lesterpt”
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