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TKenney, Ph.D.
TKenney, Ph.D., French Attorney (Avocat à la Cour)
Category: French Law
Satisfied Customers: 791
Experience:  Practicing law in France, 10+ years of experience on Paris Bar. Taught French Business Law in US
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For the first time am being asked to pay a Social Tax of

Customer Question

For the first time am being asked to pay a Social Tax of 15.5% on my UK property income. I keep being told by UK lawyers that this is not applicable under the double taxation treaty but they cannot tell me why. Can you tell me please if I have to pay this ? I have not budgeted for it and will have to sell my home here and leave France if this continues as my income is small.
Submitted: 10 months ago.
Category: French Law
Expert:  T Perrin C replied 10 months ago.

I am sorry but they would have a hard time documenting this...

You can deduct any income tax paid in the UK from this property income declared in France to avoid double taxation under the bilateral tax treaty signed by France and the United Kingdom. But what is at stake here are the CSG and CRDS social contributions, not income tax. This social contributions are due on all income received by all residents of France benefiting from French Social Security (basically the French public health insurance scheme, CMU,...). There is no way around it is you remain a French resident. The same would applied (at different rates) to pensions paid abroad to a French resident. They would be largely exempt from income tax if the tax was withheld in the country of origin but would be submitted to social contributions nonetheless.

Customer: replied 10 months ago.
But I don't benefit from French Social Security. Nor do I benefit from the French public health scheme as my health care is paid in the UK. I have also just found out that a friend who is in the French system and has both UK and French property income has been charged social tax on his French property income but not his UK property income. Last year the European Court of Justice found that it was not lawful to charge social tax on people who did not benefit from the social system. Can you please explain why you think I have to pay social charges in a country where I do not benefit from the social system ?
Customer: replied 10 months ago.
I should add that I am nearly 70 years old, on a very limited income which mainly comes from my UK rental property. I have cancer and have tried to get help from the French system when I have been incapacitated. Was told I was not eligible for help as I am not French. I have never before been charged anything in France. Last year I did not even have to pay Taxe D'Habitation as my income was so low. The tax I am being charged now is more than the income tax I pay in the UK. If this persists I have no option but to sell my house and leave France as I will be unable to pay my bills here. Ironically, for a great deal of last year and for most of this year I have been unable to live in my house in France because of works in the town cutting off vehicular access to my house, the noise and dust preventing me from working at home as well as water, electricity and phone being constantly cut off. My local mairie has now removed bin collections so all rubbish has to be taken 10 minutes' walk away. I am forbidden to carry more than 5 kg because of loss of my lymph glands. I am in despair !
Customer: replied 10 months ago.
I have had no answer and request a refund.
Expert:  T Perrin C replied 10 months ago.

The European Court of Justice ruling applied to Social contributions charged in France to NON-residents of France owning property in France. Since the ruling, they can apply for a reimbursement of social contributions paid on these French-based income. This ruling does not apply to residents of France, no matter their nationality.

French Law has it that all residents of France benefit one way or another from French social system (emergency services, public health service,...) and must contribute on all their income. As this is not technically an income tax, or a tax, but a separate contribution, taxes paid abroad on same income are not deductible and bilateral tax treaties do not apply.