The French government has reintroduced the deeply unpopular 15.5% social charge on [capital gains] property sales by non-residents. The charge was held to be unlawful in the EU case of Ruyter and the French government has accepted that sellers who were forced to pay it in the French tax years 2013 and 2014 must be refunded.
However as a result of recent amendments to Article 24 of the Loi de financement de la sécurité sociale 2016 the French government claims it can lawfully levy the social charge on all (includes EU residents) sellers of French property from 1st January 2015 onwards. It does not matter that the contract was signed before this date.
It seems inevitable this matter will return to the European Court. This new move will be resented by non-French property owners and is a retrograde step which sends out all the wrong messages. It makes you wonder about the financial state of France’s social security when the government resorts to these extreme measures to raise forced social contributions from foreign investors who cannot benefit in any way.
David Anderson, is a Solicitor Advocate, Chartered Tax Adviser, Barrister (Unregistered), Director and Co-founder of Sykes Anderson Perry Limited. He is qualified as a solicitor advocate and has higher rights of audience in all civil and criminal courts in England.
This article is for general information only. French tax and social security law are highly specialised areas and you should only act or refrain from acting after receiving full professional advice on the facts of your particular case.