Clé France

The French court follows ECJ judgement

The European Court of Justice (ECJ) in a judgment delivered on 26 February 2015 (Case C-623/13, Mr de Ruyter) ruled on the validity of the levy of social charges on real estate  incomes perceived by a French-resident working in another Member State (Netherlands) of the European Union.

The court rules ruled that this tax- accumulation was contrary to European law, and therefore prohibited between Member States (European Regulation no 1408/71 whose purpose is to ensure the freedom of workers within EU). However, this judgement did not end the dispute between the claimant (Mr de Ruyter) and the French tax administration. The outcome of the dispute was pending the judgement of the “Conseil d’Etat” (the highest French administrative court).

As expected, the “Conseil d’Etat” (CE) has just confirmed the ECJ judgement in respect of social security contributions on income from non-resident assets. In its judgement delivered on the 27th July 2015, the CE has ruled that the claimant who was working in the Netherlands and was affiliated with the Dutch social security system, should not pay any French social contributions on incomes from his assets.

Following this important court ruling, the French government will have to do what is necessary to change his legislation to be in conformity with European regulations. A bill was already introduced in March following the court ruling of the ECJ. It is also expected that the French tax administration will soon respond to the non-residents who have already issued a claim. So far, the tax administration has remained silent.

If you have paid social charges, it is not too late to issue a claim. Francophile Legal Consulting can assist its clients in claiming those undue levies.

It must be reminded that non-residents who have paid social charges in 2013 on their 2012 incomes have until 31st December 2015 to submit a claim to get their refund. Similarly, non-residents who sold a French property in 2013 and have been subjected to social charges have until 31st December 2015 to claim the corresponding tax.

As the law has not changed, it is recommended for non-residents to pay the social charges on their 2014 incomes and issue a claim afterwards.

This article was written by Loic Raboteau, French Legal Advisor and director of French Legal Consulting.

Francophile legal Consulting can assist you with international property matters. For more information on this topic, please do not hesitate to contact Loic Raboteau, managing director by completing the form below. 

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