A French tax hike of vast proportions has been announced. As a part of it, the social charges - to be increased to 15.5% - that French residents already pay on capital gains and rental income of French real estate will be extended to non-residents.
But is it legal? EU law coordinates where social charges are due, and bilateral social security agreements perform a similar role between France and third countries.
Here is what I think of it:
http://my.telegraph.co.uk/finnskovgaard/finnskovgaard/11/french-real-estate-tax-grab-on-non-residents-could-be-illegal/
In my view, it's an enormous goof.
What do you guys think of it?
I do not kow much about fiscal regulation but politics I just love. I think Hollande and Co have taken over things set in motion by Sarko's 'boys' and thrown in a few of their own. Some of them are clearly going to win popularity with the French who care about these things and spin off by letting the rest know that France is dealing with 'foreigners. However, the flaw in it is that surely the many French now living and working outside France but retaining a residence here will be subject to the same tax following the letter of the law. That will not go down well at all. Of course, as you say, it will be the slow wheels of the EU that may resolve it and lawyers will get richer on the pickings. It will cause the government some irritation but I suspect their lawyers will prepare a case that will extend this matter over at least this and the next legislature by which time so much money will have been taken in that they may longer mind revoking or revising it back to reasonable. This government is only talking about austerity measures and extending that to personal austerity by squeezing every last centime out of every person they can possible squeeze. It is also a formula for electoral promises from the opposition being presented on a plate in four years time, almost assured victory and then extra popularity by screwing back a few taxes. I suspect this will not be a priority one though.