Thank you all in advance for sharing your knowledge, highly appreciated. If someone is a French resident and has rental income from outside France (but within EU; Netherlands) and is under 65 years old, would you say that no French social charges at all have to be paid on this specific kind of income?
Talk to your local hĂ´tel des impĂ´ts.
If you are a french resident without an S1 from another country ýou may have to pay.
You need to check the tax treaty between France and the Netherlands.
There is no EU-wide arrangement (as far as I know) and your age is irrelevant.
Under the UK-France treaty, certainly UK rental income is not liable to either tax or prélèvements sociaux in France. But I always include a politely worded reminder in the Mention expresse.
Thank you very much Helenochkha for sharing your knowledge, greatly appreciated
I think you will have to declare your rental income in the Netherlands and be taxed there.
Then in your French tax declaration you should mention this income for a tax credit.
I took a look at the France/Netherlands treaty this morning (what better way of spending a rainy Saturday!). Rental income from a Dutch property is only taxable in the Netherlands under the treaty. It is exempt from tax in France. No credit for the Dutch tax can be taken against the French liability (logically since that income is exempt in France).
However France includes the Dutch income to set the rate of overall tax, which is then applied to the proportion of French taxable income over total income (incl the Dutch rental income). It’s known as exemption with progression, or taux effectif in French.
Having done a little more research, it seems that France treats CSG/CRDS as taxes for the purposes of tax treaties…In other words, if the treaty exempts the particular income from French tax, that is taken to include CSG etc, unless the treaty specifically says anything to the contrary…which the NL/France treaty doesn’t. Therefore my conclusion is that Dutch rental income is exempt from both tax and CSG etc…for a French resident.
Extract from Tax Bulletin below.
forgive me for throwing my thoughts/misunderstandings ?.. into the mix… but doesn’t one need to be affiliated to an “outside” health organization (like with my UK S1) and thus NOT a burden on the French State… to be totally exempt from the CSG type contributions??.
I always tick the box on my Paper Declaration, to confirm our status (ie S1)… and get the amount of CSG which is taken at source here in France the year before … refunded to me…
I think in this instance we’re talking solely about an exemption for one specific item, ie overseas rental income, under one specific tax treaty, rather than a total exemption on all income. This is similar to the treatment that Helenochka comments on above, concerning UK rental income, also exempt from social charges (irrespective of an S1 etc).
The logic (if such a thing can be applied to tax!) is that Dutch rental income is exempt from French tax under the treaty. As CSG/CRDS are, to all intents and purposes, taxes that go into general funds, as opposed to providing actual benefits, it is logical to exempt the rental income from them too, under that treaty.
Becoming intrigued by CSG/CRDS, I enquired a little further and found this which explains where the money goes …
Les fonds générés par la CSG sont distribués aux régimes d’assurance maladie, au fonds de solidarité vieillesse, aux prestations familiales et à la caisse nationale de solidarité pour l’autonomie. En ce qui concerne la CRDS , elle a été mise en place pour financer la caisse d’amortissement de la dette sociale (Cades).
"The funds generated by the CSG are distributed to Assurance Maladie, the old-age solidarity fund, family benefits and the national solidarity fund for autonomy.
As for the CRDS, it was set up to finance the social debt amortization fund (Cades). "
Superattentive of you to dig in this topic for me, thank you very much. Can I add some karma-points for you anywhere
Seriously amazed how kindhearted it is from you to share this with me, thank you very much, really helpful
Does anyone have the official legal text regarding not having to pay impot or CSG on UK rental income … or is the tax treaty meant to be sufficient? There is so much contradictory information on this and it just seems like the authorities are interpreting the treaty differently. Our reading is that UK rental income is not taxable in France (and by that it includes CSG) so we put it into 4EA of the 2042C. Reading the treaty again it seems even thought it isn’t taxable they want it declared and give a credit. So while we got that wrong and will correct it, they’ve come straight back to say he has to pay CSG and put his income into 4BA, 4BL and 8TK. We referenced Article 6 of the treaty but they aren’t buying it. They are saying CSG is payable. All advice gratefully received.