The CSG-CRDS taxable on the income of non-European residents is contrary to European law (Fr)

The Council of State rendered on July 27, 2015 a decision eagerly awaited by non-resident French nationals which confirms the De Ruyter judgment rendered by the Court of Justice of the European Union (CJEU) in February, considering that people who are affiliated to a social security scheme of another Member State may not be subject in France to social levies on their income from assets from foreign sources taking into account the allocation of these levies to the financing of the French social protection system.

This decision was rendered while the legislator extended the scope of the
social security contributions from French source property income received by individuals
physically domiciled outside of France in the amending finance law of

It remains to be seen what are the effects of this decision for persons subject to the

First of all, contrary to what has been argued by some parliamentarians, this
judgment only concerns residents of a member state of the European Union. The
reason for the judgment is entirely explicit and in no way allows an interpretation
Verbatim for all non-residents.

Second, the decision only concerns social contributions. Therefore,
French non-residents will always have to pay their land income under
of their income taxes in the cases provided for by article 197 A of the general code of

Third and this remains the most important element for French taxpayers:
given that the decision of the Council of State states that the disputed tax levies,
fall within the scope of the Council Regulation of 14 June 1971, the provision of the law
amending finance is therefore contrary to European law and therefore obsolete.

Consequently, the non-residents concerned may request reimbursement of
social charges improperly received by France by making a claim to their
FISC administration.

The government very quickly outlined the first elements of response as to the effects of this decision: Bercy intends to use the three-year limitation period under common law for the settlement of such disputes. Consequently, taxpayers who have not made their request before December 31, 2014 will not be able to have their contributions paid in 2012 reimbursed. The same principle applies for 2015 compared to 2013 payments. In addition, some media advertise that the government would be tempted to change the allocation of the product of the CSG on the capital to circumvent the judgment of European justice. It is notably envisaged to arrow this recipe, no longer towards the general Social Security scheme, but towards the Old Age Solidarity Fund (FSV).

A debate that will be decided as of the next finance budget to be voted on this

© Weissberg & Weissberg - 2015

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