Roche & Cie

A 15,5% saving for the non-residents (2)

Following this article,

On Thursday 26 February, the European Union Court of Justice in Luxembourg pronounced a judgment of principle, which has the effect to deprive France from now on of the right to levy social charges on property income of people contributing to foreign social security funds.

The dispute was concerning a Dutch national domiciled in France but carrying out his main professional activity in the Netherlands. As a migrant worker, he is liable to social contributions in the EU member State of his work (the Netherlands), so his incomes shouldn’t be liable to social charges in the Member State of his residence (France).

So the European Court of Justice in Luxembourg decided that France had no right to subject to social contributions their real estate incomes carried out in France, as far as they don’t benefit from French social security.

Since 2012, non-residents are also liable to these contributions on their French source real estate income. In 2012, the sum of social charges paid by the non-residents’ taxpayers amounted to 344 million Euros.

The decision of the European Court of Justice has a vocation to modify French regulations with regard to the property incomes as well as for what concerns natural individuals residents of another State. A procedure is in progress in order to extend this provision to all the non-residents (including outside Europe).

This decision opens the way to a tidal wave of fiscal claims from the thousands of non-resident taxpayers who were wrongly liable to social charges.

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Cabinet Roche & Cie, Chartered Accountant in Lyon, France.
Experts in Non-Residents Taxation.