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| Tax or social charges? |
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| Wednesday, 09 April 2008 | |
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In reference to your tax expert’s answer last month about the CRDS and CSG, the latter are NOT French social security contributions, they are TAXES pure and simple. Whether you have to pay them may indeed depend on the type of income and where it comes from, but if you also pay taxes in a country which has a double-taxation agreement with France, then you can claim credit for taxes paid there against the CSG and CRDS as you can against any other French income taxes. I don’t know why the professional tax advisors don’t seem to know or explain this – it took me several years of legal actions at the tribunal administratif to prove, but in the end I managed it, and won several thousand euros of repayments plus legal costs. By email, name withheld Virginie Deflassieux, from PKF, Guernsey replies I agree, the CRDS and CSG although labelled ‘contributions sociales’ should indeed be treated as a further ‘income tax’ and they are covered under the terms of most double tax treaties. In particular, non-residents of France should not be paying the charge on their French source of income. As for French residents who are fully registered in the French tax system, the situation is as I described last month. The income tax nature of the tax and double tax treaty relief is another debate and I was answering a specific point/question regarding the application of these charges to foreign pensions as matters currently stand. Unfortunately, taxpayers are not sheltered from a change in the law and in time it is conceivable that the French authorities ‘come clean’ and actually label the extra charges as income tax rather than class them under the ‘social’ banner. This would of course change and enlarge the scope of those charges. |
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