In the case law De Ruyter [2015] (case C-623-13-Mr De Ruyter), the European Court of Justice ruled that the taxation of French social charges on property income for European residents was against EU law.
Following this ruling, foreign tax residents, residing in EU or in the EEA were able to claim a refund of the French social charges they have paid on their French property income (capital gains or rental income).
Since 2015, our firm has successfully claimed the refund of social charges for foreign tax residents on their French property income. However, good things always come to an end!
In 2019 the French government changed its tax law. Non-residents residing in EU/EEA or Switzerland and registered with a social security scheme in their home country would pay a solidarity tax of 7.5% instead of the social charges (17.2%).
It should also be reminded that according to French procedural tax laws, any claim must be submitted within 2 years from the payment of the social charges.
What does it mean for British residents?
- If you sold your French property in 2018 and paid social charges on the capital gain, you have until the 31st December 2020 to claim them back. After that, it will be too late;
- If you paid social charges on your 2017 rental income (French income tax return 2018), you have until the 31st December 2020 to claim them back;
- You can no longer claim back social charges for any French property sale, which occurred before 2018;
- You can no longer claim back social charges for any rental income received before 2017;
- For any sale that took place in 2019 and 2020 (during the Brexit transition period), or for rental income received in 2018 & 2019 (income tax returns 2019 & 2020), you should have paid the solidarity tax (7.5%) instead of the social charges (17.2%). If you have wrongly been taxed, you can claim the difference;
- From 2021, after the end of the Brexit transition period, British residents will be subject to the payment of social charges (17.2%), unless special treatment is agreed between the EU and the UK in that respect.
Why should you use us to claim back your social charges?
- We are proactive and will help you to gather the necessary documents to make your claim;
- We will issue your claim within five working days from receipt of your instructions and necessary supporting documents;
- We will follow up with the French Tax Administration and update you throughout the process, which takes up to 12 months on average.
So, if you sold your French property in 2018 or paid social charges on your French income tax return 2018, time is of the essence!
If you are in the above situation, please contact Loic Raboteau at loicr@bandmlaw.co.uk for a free assessment and estimate of cost.
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