Reimbursement for Non-Residents: An opportunity if the sale of your property took place in 2014 or 2015
If you are a Non-Resident and have sold property in France, this might be an opportunity for you to seize. However, there are two sides to the story to bear in mind.
Firstly, a bit of fiscal history: in 2012, the French Government sought to find additional resources to reduce the deficits of the social system. On the 16th of August of this same year, the law 2012-958 was implemented. This law extended the collection of all social contributions to the acquisition of real-estate assets, and Non-Resident property income at a rate of 15.5%. In other words, from here on all Non-Residents would be required to contribute to the French social system. As one might expect this change was met with alarm and certain Non-Residents even appealed to the European Court of Justice on the grounds that they should not have to contribute to a system that they did not have access to.
The European Court of Justice ruled in their favour in a judgment issued on the 26th of February 2015, and stated that France should not collect social contributions (including CSG/CRDS) on property income (capital gains on property, or rentals) of Non-Residents as they were not affiliated with any compulsory French social security system.
Secondly, the good news: the French Administration has cooperated. By decision of the State Council made on the 27th of July 2015, Non-Residents can now request a CSG CRDS refund by filing a claim up until the deadline of the 31st of December 2016. This applies to all property income (from rentals) received in 2014 and for capital gains on property made in 2014 and 2015 only.
In practice, you must meet the following criteria:
- Reside in an EU country, Iceland, Liechtenstein or Switzerland
- Be affiliated with a compulsory social security scheme other than the French one
- File your refund application before the 31st of December, up until 2 years after the actual payment of CSG/CRDS occurred.
All of your social contributions  are subject to refund:
- General social contribution (CSG): 8.2%
- Contribution to the repayment of the social debt (CRDS): 0.5%
- Social security: 4.5%
- Additional contribution: 0.3%
A delay interest will be added to these rates, at 0.4% a month – which equals 4.8% per year – on the length of time between the month when the CSG/CRDS was paid and the day the French Administration issues your reimbursement.
Our team can help you evaluate your chances of success in this matter, to put together your claim letter addressed to the relevant specialized body, and ultimately follow up on the progress of your case until the final receipt of the refund you deserve.
The other side of the story:
At the end of the year 2015, the French authorities reassessed the situation and actually reallocated the CSG/CRDS to funds that do not finance the French social security system. As a result, the CSG/CRDS on real estate gain (as of January 2016) and on property income (received in 2015) are no longer reimbursable. This is due to the fact that they are to be considered as “taxes” from now on, and not “social contributions”.
As of the 1st of January 2016, the French Tax Authorities will continue to levy the CSG/CRDS on real estate gains of all Non-Residents.
This is a matter to be followed up on. Here at Maupard we would be more than happy to look into your individual circumstances, to help you make sense of the consequences of this change and work in your favour.