Prélèvements sociaux

Banking & Financial Tax & Social charges
121

Hi Doreen,


I think often it really does come down to 'ticking the right boxes', but then it isn't always easy to know what to do, perhaps not until it's too late... A very unfair situation.

Other than the prélèvements sociaux, your circumstances sound similar, we have had to request the 100€ reduction on the taxe fonciere too, which I also was under the impression that it should be automatic after 65 on a lower income. Although, I believe there is a rule (ofcourse) that you must be 65 on a certain date for it to count for that tax year, ie not just jurning 65 in that year...

Does your revenu come from mixed sources?


Department 11 (by the way)

122

I thought I had the tax situation figured out when I moved here 6 years ago, but hadn't figured on the CSG.. I don't like it.. it's my fault I didn't do my research properly.. but I ain't whinging and saying it's a "tax on foreigners".. I understand why i have to pay it.. I pay up and shut up.. and remember my reasoning for leaving England.. and for not wishing to return. I still have a great life here despite zero interest and rubbish exchange rates.. hopefully can stay until i croak..

123

Husband going to the Tax Office tomorrow....I shall pray!

124

Well I have sent the Tax Ombudsman of the Vendee an email asking if we should be paying this extortionate tax bill...awaiting a reply and not holding my breath....

125

well hopefully Doreen you wont get one...sounds like you shouldnt....

126

We haven't received one either. What area are you in?

127

We decided 2 years ago that returning was the only option that would offer us what we wanted for our future....that is some security in knowing what we will be paying in taxes and being safe in the knowledge that the money we invest in a house wont disappear overnight. We have sunk a huge amount of money in France buying two properties.....that will probably never sell. Regrets? oh yes. but nothing we can do about it. Property is set to nosedive in France next year...and we will lose several hundred thousand pounds; not money we can remake as my OH retired. It was a gamble and it failed miserably, our kids are the ones that will miss out.

128

I have had property in France for 40 years and the way things panned out I ended up with the French property after a divorce. It wasn't worth much- I bought it for £2000 in 72! Then I sort of took root here and eventually decided with wife No 2 to retire here. We bought a larger house to retire to and the plan was to take 5 years doing it up. Fate intervened and 8 months after our wedding and buying the larger house she discovered that she had cancer which turned out after a very brave fight to be fatal. However by then we had moved here and I had sold all my personal property in the UK. My late wife told me not to stay sinle so I didn't. I have really become embedded here and can withstand some challenges but I am not going to admit defeat and go and live somewhere in the UK where I don't want to or much further afield (I have some health issues). Therefore for the time being we are here and propose to enjoy it! I ahve the joy of a young daughter (only sons from my first marraiage) and I am lucky that I have some income, even if it is being taxed more than I originally thought! We are survivors and can probably live cheaper here than in most parts of the UK (at least those parts which would be tolearble). To move back would cost tens of thousands of £s anyway! I do realise that some people will be in a pretty awful situation. Buying abroad always has risks (friends had their house pinched by Turks in Northern Cyprus, other friends lost Portugese property in the revolution there years ago, the Spanish problems, etc etc etc) Blessings are to be counted as well!

129

That's another thing, 'better off returning to the UK' not if you own any property here surely.....

130

Hello,


Apparently, they 're-did' the convention, which I believe is large part of the recent problems. There used to be some 'loopholes' for expats, obviously the French want to stamp them out! That and the fact that M Hollande has decided to honour Sarkozy's plans for punishing 'foreigners'.

I think it's awful that retired expats are being treated like this. I too have thought that it may be better financially to return to the UK, however people have made the decision to retire abroad for a reason and as such I feel returning should not be the only option.


I realise that there are some differences with the situation I described for for a 66 year old, modest pension/income, living alone, but clearly there is also one definite similarity tax abuse!

It is true that here, you 'must' pay first and ask questions later (or not ask any questions and just pay!)

What if you don't have any tax to pay in the UK (as below thresholds)?

Something else I'd like to know what if you have a bit of cash, perhaps investment bond and they don't make any 'profit' or even make a loss.....?

I hope we will all find a satisfactory solution soon.... the 15th of november looms closer.

131

I'm about to find out! They have taxed me on some consultancy income from the UK at 8.2% for CSG and another 4.8% on the same income for PSCA. Those sort of seem fair as we had no income tax generally to pay. However they have then charged me 0.5% for CRDS on the same income, plus my pensions from the UK plus rental income from the UK (most of which has already been taxed in the UK at 20% before I get it). There is a little dividend income (taxed at 10% in the UK) and bond interest received too. From all that I have read rental income income received in the UK and taxed there should not be taxed again. Therefore the total tax take is currently in the order of 33.5% which is way over what it should be. My circumstances are that I am retired, aged 67, but with a much younger wife and young child. I am going to write to them first and then visit the office. I decided to pay anyway and then challenge. I expect it take a great deal of time. I have determined that these additional taxes have to be paid in one lump and there are no facilities for stage payments which seems pretty harsh. I have just let out a cottage here and it seems that 35.5% of any net income on that will disappear too so it's going to be best to spend some money on it which will be more efficient.

My solicitor in the Uk is a cross border specialist and he is of the opinion that many UK expats will be better off going back to the UK. However as you get older the attaraction of another move diminuishes and may well not be cost effective over the remaining period of your life.

132

Hello everyone,

The French (tax) system drives me mad!

Is there anyway to get an exact answer on this particular subject, without a) paying for it or b) only having the local tax office as an option....


In this case, the problem concerns someone from the UK, they are retired (over 65)

The last declaration pension/income made was 'non imposable' as under the plafond, however the person in question has received an avis for Prélèvements sociaux, CSG, CRDS etc

The individual used an S1 from the UK for healthcare, therefore as I see it the health and social costs and carte vitale are linked to the UK and not France.

The limit for the impôt sur le revenu is 10024€ for one person (before being liable to pay tax)

The declared 'income' was 5850€, well below.

The person would not have to pay taxe d'habitation for that year, nor revenu tax and would also 'benefit' from 100€ reduction on the taxe foncière (which by the way is 1226€ for a small 2 bed house, in a small town)

The prelevement social that is being demanded is 435€, they base this on an amount declared of 3200€ I believe.

There is a possibility that the above amount was put in the wrong column on the declaration form, but it's very difficult to complete these French forms, sometimes even for the French.

It seems that the PS is meant to be for RCM or revenu capitaux mobiliers, which the person doesn't have. It may be that the income was meant to be put in the pension column, but wasn't.

Just to mention, I have read somewhere that there are certain kinds of income that do not have a column in France and that as such it is best to include them with the pension, although I'm not sure, if someone can clarify that.

Anyway, the local tax office have been contacted and they don't want to do anything (obviously). They state only that the RCM coming from the UK is taxed at a rate of 13.5% and that RCM from France is definately taxable, perhaps even at a higher rate. They then said that there is no 'plafond', that the revenu fiscal de reference doesn't matter at all for the revenu from the UK, but that the French revenu has an allowance upto 61€ before being liable for tax....


So, what is the situation with the S1, social / health charges for retired expats? I read here that retired expats covered on an S1 shouldn't be liable for CRDS/CSG etc in France. Yet France take it anyway?

The local tax office wasn't bothered about the S1 issue, they quoted article 11 of the tax convention between the UK and France. Which in itself is extremely confusing for those who have tried to read it. Basically, saying that the convention states that the tax must be paid. They were clearly not bothered about the fact that the person's income put them below the 'seuil de pauvreté' for the last year.


I'm absolutely appauled, how can something like this happen, it wouldn't happen in the UK. No one wants to bad mouth France, but you have to admit sometimes they make it very difficult for expats (intentionally or not)

It seems, it can only get worse.

Now what......?

Thanks for reading, any help greatly appreciated.

133

Finn,

You state:

‘they point out the source of the confusion, but they are incomplete in that they don't mention the confusion that stems from the double status of the CSG and the CRDS as taxes and social charges at the same time’

That double status is true, certainly insofar as the ECJ judgement is concerned, although it was not relevant to mention it within the context of the advice that was being given, which was solely about social charges exemption rights on pension income.

Moreover, it is by no means clear that the double status is the current view of the European Commission, who, in a statement issued to us recently (and published on our site) regarding the application of social charges on the sales of second homes, stated:

"French social charges are applied on a wide variety of income sources, such as investments, rental income and capital gains. They are not only levied on wages, salaries or pensions. These social charges therefore form part of the general system of taxation.

You go on to state:

‘the French treat them (social charges) as taxes when it's more favourable to them, even by including them in the double tax agreement with the UK’

On the contrary, the fact that they are defined as taxes under the DDT is of great benefit to many British expatriates in France because there is 100% relief against social charges for income that is solely taxable in the UK. So UK rental income and government service pensions escape social charges precisely because they are considered to be a tax.

In addition, because they are also considered to be a social security charge by the EU (and enshrined as such in French social security legislation), those on pensions and an S1 escape liability to the social charges, in the process also obtaining free affiliation to the French health service.

Heads they win, tails they win!

You state further:

‘I question if the information that rental income even from France can be subject to CSG and CRDS if the owner is subject to UK social security by holding an E121 or S1 is correct, as EU law would take precedence over national law.’

The reason why pension income and not other income is exempt is because the former has been earned through the payment of national insurance contributions, thereby granting a right to an S1, whereas rental and other investment income does not form part of the nexus between social security rights and insurance contribution record.

Thank you for pointing out our error in describing an applicable Regulation as a Directive, which we have now corrected.

134

Thanks Finn

135

Hi Chris, it was mentioned right at the beginning

Reply by David Yeates on October 21, 2012 at 15:01

The link above to our advice on the liability of retired persons to social charges will I hope help some of you.

However, the situation is more complicated for 'early retirees'. That is to say, those under the age of retirement and neither in employment nor running a business.

The reason why your bill for social charges has gone up this year is due to a change in the tax collection arrangements, which we set our in an article in our Newsletter in June.

http://www.french-property.com/news/tax_france/social_charges_colle...

Admittedly easy to miss in all the side discussions though!

136

Ah, now in a paragraph from your first link attributable to a Siddalls comment on the subject, the following throws some light upon things:

"...Much of the mess has come about due to a change in the tax collection arrangements, with responsibility for the collection of the prélèvements sociaux on foreign revenues having been passed from 'URSSAF', the social security collections agency, to the local tax offices..."

I wasn't aware of this, and I'm not sure if it has been mentioned throughout this thread.

It certainly throws some light on my situation, as I pointed out at the outset that I was already paying URSSAF contributions, and had received this additional bill from the Tax people. If I have read correctly, this rather suggests that they are trying to charge me twice, and that as in the case of the 2007 fiasco, the left hand doesn't seem to be aware of what the right hand is doing, and anyway local and regional interpretations of the new laws appear to lead to variations in how the changes are (or aren't) administered and applied.

The French may be uber-bureaucratic, but they appear not have a clue as to how to distribute information amongst themselves so that everyone is singing from the same hymn-sheet.

As it is, I shall be officially of pensionable age in January, and I have my pension figures from Newcastle. They are apparently enclosing a form S1 when they send out these letters, but I didn't receive one, so having been in telephone contact with them yet again, they have promised to send me one. I shall traipse of to both the local CPAM and Tax offices when I get the form, together with everything else I think they may require in order to make my case.

Chris

137

More information on this subject from David Yeates at www.french-property.com and Finn Skovgaard at Streetwise France

138

If it helps any ours is ventilated into

Revenu de Capitaux Mobiliers (2)

Revenus Foncieres nets (3) taux de l'imposition CSG 8.2% CRDS 0.5% Prelevement Sociaux et contrib Additionelles 4.8%

It also says at the bottom that CSG deductible sur revenus de patrimoine (9) pris en compte.

I am currently disputing the "tax" on the revenu fonciers.

Does that help know what's on the form?

139

well yes Finn - thanks for that. I have just looked on that site and the guide de l'autoentrpreneur does seem to confirm what you say in its first paragraph.

I will pay a vist to les Impots;

Regards

geoff

140

ok I accept Finn that "interest is revenue" - what I meant is that on my tax return I declared uk bank interest and AE business turnover - and these are the two figures on which they have based their demande for the prelevements sociaux.

If you are correct that they should not levy any prelevements sociaux on my AE turnover, that is good news - but I guess it will be dificult to convince the Impots of this unless you are possibly able to point me to an official document which states that.

Cheers

geoff