French news ©Stuart Miles

On March 21, 2016 the French Tax Authority has started making refunds of the social charges unlawfully deducted on sales by non-French sellers of their French properties. The amount being refunded is 13.5%. 2% of the 15.5% deducted has not been refunded on the basis that it is not covered by the EU Court decision in the De Ruyter case. Payments are being made direct to claimants bank accounts as notified by claimants to the French Tax Authority. Claimants should contact the relevant tax authorities to ensure funds are transferred to them.

Background

France has deducted social charges at 15.5% on the sale of French properties by non-residents as well as on rents received by non-residents. This was declared illegal by the European Court. Many people have requested repayment of these charges which have not been made until French law is changed to conform to the EU Court decision.

France also required non-resident sellers of French land to appoint a tax agent who typically charged 1% of the sale price. This has also been declared illegal and no longer applies. Most people who reclaimed the social contributions also claimed for repayment of the tax agent’s fee.

In October 2015, the French government said that the EU decision means that money collected from non-residents must no longer be aimed at financing French social security payments. They therefore intend to continue levying this contribution but applying the money raised in a way which does not conflict with their interpretation of the EU ruling. New laws will be passed to cover this.

However people who have already paid the contribution [under the label of social security payments] which has been declared illegal, should soon be able to reclaim it provided they are EU residents. It is unclear whether interest will be paid or any loss for currency movements.

There is no word yet on refund of tax agents’ fees.

Our view

The French government is paying interest on the money but is not paying for any currency loss or refunding tax agents fees. Sykes Anderson Perry’s view is that these should also be refunded. The total sum the French government is having to refund is understood to be well over a billion euros.


David-Anderson, Sykes Anderson PerryDavid 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.

2 Responses to “Breaking: Refunds have started on social charges on French property sold by non-residents”

  1. Avatar

    breelbob

    I understand most of the Social Charges refund situation. I lodged my claim before the deadline 7 now have a letter asking for a RIB (Hurrah) . The most significant problem remaining is the French are asking me for proof that we were paying NICs (Social Charges?) in December 2014. Since we are OAP,s & not registered for anything relating to Social Charges in France how do we prove we should be considered outside the French system? Our income is,was generated in the UK & we paid NICs along the way & receive our State Pensions. In France we do not claim/receive anything,,we do not even have the Carte Vitale.

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  2. Avatar

    Colombieres

    I was told by my french solicitor I was eligible for refund in March but nothing further heard. It seems the goalposts are ever changing. It’s a complete fiasco. I am being charged 15% by the people who worked out the original fees to give me back what’s owed plus £600 solicitor fees! Please anyone out there email if you have any info. Sue . boothbeckwith (at) gmail.com

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