The consequences of Brexit on the CSG-CRDS rate

25 February 2020

With the ratification of the withdrawal agreement, the United Kingdom exited the European Union in an orderly fashion on 31 January 2020 at midnight.
The question is what will be the consequences of this exit in terms of social security contributions?

The Social Security Financing Act for 2019 provides that as of 1 January 2019, persons covered by a social security system of one of the member states of the European Economic Area (EEA) or Switzerland are exempt from CSG and CRDS on investment income and wealth and are only liable for the solidarity levy at the rate of 7.5%.

But will this measure continue to apply to residents of the United Kingdom following its exit from the European Union?
We now know that European Union law will cease to apply to the United Kingdom at the end of the transitional period until 31 December 2020.

This transition period, as set out in the withdrawal agreement, ensures that during the year 2020 nothing changes for individuals and businesses, to give everyone time to start implementing the withdrawal agreement and to consider the future relationship between the EU and the UK, which is still to be negotiated.

As a result, following this transitional period, if nothing is negotiated, European Regulation (EC) No 883/20004 on the coordination of social security systems will no longer apply to UK payers and UK payers will no longer be subject to the 7.5% solidarity levy but will be subject to all social security levies at the rate of 17.2%.

An agreement between France and the United Kingdom can then be expected which would allow this regulation to continue to apply to UK residents even after the end of the transitional period.

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