Thursday, January 3, 2019

EU Residents May Be Able To Claim Refund Of Social Security Contributions On French Investment Incomes

French Courts have recently judged illegal social security contributions which were levied on investment incomes received by EU resident who were not affiliated to a French social security scheme

In 2015, the Court of Justice of the European Union (CJEU) already judged illegal French social security contributions which were levied on investment incomes received by EU resident who were not affiliated to a French social security scheme (CJEU, Case C-623/13 of February 26th 2015).

Following that decision, the concerned taxpayers were able to claim for the refund of unduly paid social security contributions.

With respect to end-year Financial Laws for 2016, French Parliament changed the allocation of State revenues arising from social contributions in order to comply with EU Regulation, but maintained the taxation of investment incomes, irrespective of the social security system the recipient is affiliated to.

Despite French Parliament’s changes in budget earmarking, French Trial Courts and a Court of Appeal have recently judged such a taxation still illegal as far as the French-source investment incomes are received by an EU resident who is not affiliated to a French social security scheme.

The case has been brought, and is currently pending, before the French Supreme Court.

Tax Claim Opportunity

In this context, should the challenged taxation is declared illegal, concerned EU residents may be entitled to claim the refund of social security contributions they paid since 2016 on their French investment incomes.

Taken into consideration the length of the procedure, the taxpayers may be keen to preserve their chance to obtain such a refund by filing a claim before the expiration of the limitation period for such claims.

Who is Concerned

EU residents who are not affiliated to a French social security scheme but who paid social security contributions on French-source i) rental incomes and ii) capital gain arising from the transfer of French real estate assets.

When Tax Claims Shall Be Filed

The claim period is generally of 2 years following the one during which social contributions were paid. Therefore, claims related to the refund of social contributions shall be filed by December 31st 2019 at the latest for social security contributions which have been paid from January 1st 2017 to date.

Who to Contact

Oratio Law Firm would be delighted to assist you in this respect. Please feel free to contact us for any further/in-depth information on that matter.


Philippe Hery
Attorney at Law, Partner
Tax specialist
T : +33 (0)2 41 66 62 80
p.hery@oratio-avocats.com

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