cost comparison - CMU - cotisations - PHI

[woolybanana]

d'un régime obligataire français d'assurance maladie 

This phrase is totally ambiguous if you look closely as it can be interpreted any which way. So dont go racing down any dark alleys guys.

[chessfou]

IMHO, on the basis of the regs quoted, "no" - PHI means neither CSG nor CRDS.

But employment, self-employment or continued CMU  means both CSG & CRDS payable (on UK pensions as well as earnings).

[Ron Avery]

Well either Blevins, the French website or the French tax system are wrong.  When we first came here we completed our tax return at the tax office late in the year and declared no unearned income as we were not asked to, we paid no social charges that year.  For subsequent years we have had savings interest and paid social charges CSG etc based only on the unearned income declared not the pension.  This year due to an error, the interest did not get onto the tax return on line although it is clearly shown on the copy, so I filed an error report at the tax office and await an amende tax avis  however, to date I have not  received a bill for social charges. 

So in your own case chessfou, have you been paying CSG and prelev on your total income?  You can easily tell by looking at the amount that is stated for the calculation of CRDS, CSG and Prelev on the bill, as can anyone else, so has anybody on here paid CSG and prelev on their pension?

[BJSLIV]

Ron, is your private pension actually a Government  IE taxable in the UK pension?

I think there are two things here.

1 If you have a 106/121 then you are exempt on pension income.

2 Even if you don't have a 106/121 then if your pension is taxed in the UK, as a Government or allied pension, then that is also exempt from CSG in France.

As to the liability for those in the future who have no 106/121 and are excluded from the CMU????????? Personally I think they would be exempt.

http://www.telegraph.co.uk/global/main.jhtml?view=DETAILS&grid=P8&targetRule=0&xml=/global/2006/04/11/expatqanda.xml

On an unrelated thought If as is rumoured people with pre-existing conditions are allowed to stay in the CMU, will they be expected to take private insurance AND pay their 8%?

8% for their existing condition nd the private cover for the rest.

[Sunday Driver]

[quote user="chessfou"]SD,

The trouble is that the text you have dug up refers only to the CRDS.

The more important bit is the CSG.

I will have a rummage around www.impots.gouv.fr but don't you think it would be surprising if both Blevins and whoever wrote the French-Property guide had got this so outstandingly (and identically) wrong?
[/quote]

chessfou

I can't speak for the information published by Blevins et al, but the French tax office makes the situation quite clear.

CSG/CRDS/PS are chargeable on French earnings and pensions and are deductable at source by either the employer or pension provider. The earnings/pension is then declared on the 2042 which generates the annual income tax calculation.

According to tax guidance note 2041GG and the notes to form 2047, foreign earnings/pensions (subject to the assurance maladie exemption) are liable to CRDS only.  Because this is not deductable at source (as in the case of French incomes) the foreign income must be additionally entered in box TL which generates the separate CRDS charge.  There is no mention of CSG/PS being imposable on foreign earnings/pensions. In fact, if you run some example simulations through the impots on-line tax calculator, you'll find there's no actual method of declaring foreign earnings/pension for CSG/PS.  

Unearned income (French or foreign) is declared under other areas of the 2042 which generates the CSG/CRDS/PS charges at the approprate rate.

 

[Sunday Driver]

[quote user="BJSLIV"]

On an unrelated thought If as is rumoured people with pre-existing conditions are allowed to stay in the CMU, will they be expected to take private insurance AND pay their 8%?

8% for their existing condition nd the private cover for the rest.

[/quote]

If you are affiliated for CMU under condition of residence and liable to cotisations, then your 8% entitles you to cover for everything.  I don't see how they can just cover a predefined condition and exclude everything else - besides, I suspect their systems won't be clever enough to do this.

 

 

[chessfou]

Ron,

[quote] So in your own case chessfou, have you been paying CSG and prelev on your total income?[/quote]

No, not yet, still on E106, therefore not "à la charge, à quelque titre que ce soit, d'un régime obligataire

français d'assurance maladie."

That will change as soon the E106 expires in January, so that would be the 2009 tax return (for 2008).

BJSLIV,

The relevant phrase is that which I quoted above from the actual tax regs as on www.impots.gouv.fr (click on "documentation" button, next page click on "Accédez à la documentation fiscale" near end of first paragraph, opens new window - then search "contribution" to bring up the list you need and which you won't find from searching "contribution" on the front pages of the impots site. Now, under "CSG" click on "124ets" for chapter and verse), so:

(1) those "a la charge" pay CSG on UK pension* income (includes those on CMU-B);

(2) those not "a la charge" do not (includes all on E-forms and PHI).

(* I haven't checked for govt. pensions exception or odd exceptions like retired diplomats)

[Roz]

Oops wrong thread! [:)]

[Ron Avery]

No BJ I don't have a government pension, my pension is taxed in France.  Are you saying that you pay CSG on your total income then?

I come under the rules outlined by SD and complete a  2047 form and a 2042 and declare my income in boxes TS and TL.

Chessfou, I always have understood that the a la charge exemption with an E 106  applies only to the CRDS, not the CSG and prelev sociale payable on unearned income.

The bill for social charges calculates the CRDS on the total income.  The CSG and prelev sociale are only calculated on the declared unearned income. In the listings on page 3 of the contributions sociale which list the revenus on which CSG  and prelev sociale are levied it does not include pensions.

So, as you presumably made a tax return for 2006 have you received a bill for social contributions?  If so,  was the amount detailed on the front that CSG and Prelev sociale was deducted from based on your total earnings or only your unearned income?

[Sunday Driver]

[quote user="chessfou"]
The relevant phrase is that which I quoted above from the actual tax regs as on www.impots.gouv.fr (click on "documentation" button, next page click on "Accédez à la documentation fiscale" near end of first paragraph, opens new window - then search "contribution" to bring up the list you need and which you won't find from searching "contribution" on the front pages of the impots site. Now, under "CSG" click on "124ets" for chapter and verse), so:
(1) those "a la charge" pay CSG on UK pension* income (includes those on CMU-B);
(2) those not "a la charge" do not (includes all on E-forms and PHI).
(* I haven't checked for govt. pensions exception or odd exceptions like retired diplomats)

[/quote]

The above document fiscale relating to CSG refers to the normal charge on (French) earnings/pension and notes the method of collection at source through the social security agency.  It makes no specific mention of the treatment of revenu d'activité et remplacement étranger.  The only foreign income mentioned is that for 'patrimoine' which is dealt with in the same manner as the equivalent French unearned income which is manually declared on the 2042.

The document fiscale relating to CRDS does make specific mention of revenus d'activité et remplacement étranger ,which is reflected in 2041GG and in the modality of the tax declaration. 

Here is a recent response from the Paris tax office on the treatment of foreign pensions:

British old age pensions and private pensions should be entered in box TL, only if you do not hold the document E121.  If you hold this document E 121 ( still running in this fiscal year) you are not in the French social security system.  In fact, with that document English retired people are in charge of the British security system
you have nothing to declare in box TL.  This is following a jurisprudence of the europeen court of justice ( 15 fevrier 2000)

I hope the above informations will help you, I am staying at your service

Francine Riboulet Contrôleur des Impôts

As box TL only generates the CRDS charge, that is all you pay.  There is nowhere on the tax declaration where you enter a earnings/pension figure to generate a CSG charge.

In my own case, I enter my UK private pension in box AS then again, in box TL.  AS calculated the income tax and TL calculates the CRDS charge.  I do not pay CSG or PS on my pension.

[cooperlola]

[quote user="Sunday Driver"][quote user="BJSLIV"]

On an unrelated thought If as is rumoured people with pre-existing conditions are allowed to stay in the CMU, will they be expected to take private insurance AND pay their 8%?

8% for their existing condition nd the private cover for the rest.

[/quote]

If you are affiliated for CMU under condition of residence and liable to cotisations, then your 8% entitles you to cover for everything.  I don't see how they can just cover a predefined condition and exclude everything else - besides, I suspect their systems won't be clever enough to do this.

 

 

[/quote]My own suspicion is that this is why it is taking so long for the circular to go out to CPAMs.  If there is to be any relief for the long-term sick - it is going to cost the French health service a packet, once they take on only the sick and the rest are opted out - if this is the plan.  Unfortunately, as with the 5 year rule, all we can do is sit and wait to see what the document says.  Speculation will only achieve one of two things - getting your hopes up, only to have them dashed; or fearing the worst and worrying about something you can't control.  All we can do is to wait and see, and fight against what is apparent at present, until we get a difinitive statement as to what might or might not happen in the future.

[Ron Avery]

Mme Roboulet is actually in the SW tax office, not in Paris and in the past has been very helpful to many on here with english language tax questions in their early years. I had a look back and found a reply I had from her relating to a query about box TL.

........"with the informations you have given in the message, I think the calculation of the tax is correct if you have fill in form 2042 page 4 point 8 box TL.  There, you should have the amount of the private pension taxable to CRDS the rate of the tax is 0,5 % on the private pension".

[Dominique]

Having read this thread, I am now totally confused about the payment of CGS on non-government pensions (UK and Irish).

Ron said : The CSG and prelev sociale are only calculated on

the declared unearned income. In the listings on page 3 of the

contributions sociale which list the revenus on which CSG  and prelev

sociale are levied it does not include pensions.

can you just tell me on what document is this page 3 with the listing ?  thanks

the Cleiss ( http://www.cleiss.fr/docs/regimes/regime_france/an_0.html)  website states:

The CSG is paid on income from employment, substitute income, property

income and investment income. The CRDS, which came into effect on the 1st

February 1996, is also paid on all income. All persons treated as residents

of France for income tax purposes and subject to a French compulsory health

insurance scheme are liable to the CSG at the rate of 7.5% and the CRDS

at the rate of 0.5% on their earnings.

Surely pensions are "substitute income", thus liable to CSG at 7.5 per cent ?

 I have been asking the person who helps us to do our tax return and he told me that he has been getting different answers from different officials, and so far, we have not been affiliated to the French Sécurité Sociale, so not relevent at the moment.

Dominique

[chessfou]

My own opinion is that the French tax regs are quite clear in that CSG is payable (barring E106, E121, PHI, etc) but because it is invariably deducted at source here, foreigners generally get away without paying it because the tax system "black box" seems to lack the relevant inputs to enable collection (since the black box expects that it "will" have been deducted at source).

Leaving aside questions about what exactly is a "pension" and what are "rentes viagères à titre onéreux."

I have no other way of reconciling the tax form notes (which I am well aware of and to which SD keeps referring) and the tax law (to which I have been referring).

It would be really, really useful to hear from Bill Blevins (or anyone who has been to Blevins Franks for advice, or any other accountants). I may also try asking a (French) poster on another forum who I think may be an "expert comptable."

[BJSLIV]

My own opinion is that the French tax regs are quite clear in that CSG is payable

Thats exactly what was said in the Telegraph article (Sourced from Blevins) that I mentioned on the previous page said  

In practice, pension income from non-French sources tend to only pay 0.5 per cent CRDS social charges in any event, not the total 7.1 per cent

[Sunday Driver]

[quote user="chessfou"]
It would be really, really useful to hear from Bill Blevins (or anyone who has been to Blevins Franks for advice, or any other accountants). I may also try asking a (French) poster on another forum who I think may be an "expert comptable."
[/quote]

I'm sure if you asked him, Mr Blevins would provide the same advice as published on his website.  However, there does appear to be some doubt as to whether this advice reflects the actual process of declaring pensions for CSG.

Why not just write to your tax office and ask them which part of your tax declaration do you complete in order to be charged CSG on your UK pension?  When they tell you it's not chargeable, you can just file their letter, safe in the knowledge that you've obtained the definitive legal ruling......

When the tax people realise there's a black hole in the system and close it for the rest of us, then we'll know who to blame....[;-)]

 

 

[Ron Avery]

But are we  agreed that the other social charges (CSG and preleve sociale) are levied and payable on unearned income whether or not you have an E form?

It appears unless I am totally confused and who isn't now[8-)] chessfou thinks that an E form excludes payment of these charges but on page 3 of the sociale contributions bill, it does not exclude E form holders from paying these which are in box TS (not TL) on the tax form.

[chessfou]

SD,

I think perhaps I will demonstrate my integration by dealing with this in the French manner ... [;-)]

[Sunday Driver]

[;-)]

 

[sunshine 2]

Help!  Ihave to admit to not understanding the posts about CRDSand CSG and how that will affect people on private health care rather than CMU de base.  I know it's not just me as I have been discussing it elsewhere.  I have also looked at it in my PKF tax in France Bible and it's still not clear.  Is it a meaningful amount of money that might make a difference to affordability of PHI?

So - could Sunday Driver, Ron Avery, BJSLIV, and anyone else that thinks they know- please all answer this suggested scenario to see if you agree - as I think it will facilitate a understanding by a wider audience.

Example: Brit in France paying currently into CMU de base - income is total 30,000 euros of which 20,000 is private pension from UK employment (obviously not yet eligible for state pension) - 5,000 euros is from property rented out in UK and 5,000 euros is from interest on savings in UK.

Can the 3 of you tell me what you think that hypothetical person will pay in CRSG and CSG while a member of CMU and what they will pay if out of CMU and with private health insurance.  I hope you all agree or the debate will carry on..........

 

[ams]

Excellent idea.

 

Perhaps a couple of other examples would also help to include some french interest and rental income, dividends, local and overseas plus capital gains. in other words the essential income that is deemed to be unearned or inactive income.

 

ams

[Ron Avery]

[quote user="sunshine 2"]

Example: Brit in France paying currently into CMU de base - income is total 30,000 euros of which 20,000 is private pension from UK employment (obviously not yet eligible for state pension) - 5,000 euros is from property rented out in UK and 5,000 euros is from interest on savings in UK.

IMHO assuming no E forms, you would pay 0.5% CRDS on the total income and a further 10.5% (CSG and preleve sociale) on the 10,000€ which would be treated as "unearned" income.

Can the 3 of you tell me what you think that hypothetical person will pay in CRSG and CSG while a member of CMU and what they will pay if out of CMU and with private health insurance.  I hope you all agree or the debate will carry on..........

With an E form IMHO you would not pay the 0.5% CRDS on the total income.  I don't know if you had a PHI if you would be exempt from CRDS, but I doubt that you would be exempt from all social charges.  The exemption from CRDS was based on another country paying your health care costs, not having a PHI..

[/quote]

AMS I think you are taking looking for free advice a bit too far, if your affairs are that complex I would not take advice from a Forum, I would pay and get an accountant. For what its worth, most of what you quote would be treated as unearned income, wages and pensions are "earned" income

[rothrugby]

I did a tax talk last year for members of our association and we clarified sevearl things with the tax office.

 As a general rule

CSG- is payable on all unearned income from abroad , excluding state or private pensions.

CRDS-  is payable on all unearned income from abroad , including state or private pensions

Prel soc- is payable on all unearned income from abroad , excluding state or private pensions

Having said that, the situation is different for people with an E121 registered with CPAM. We asked the following question;

IF I have an E121, I do not need to enter either private or state pension income in Section V111 on form 2047? Is this correct?

Reply received

Yes, that is correct. If you hold an E121 you do not need to pay social levies on your pensions. You are not in charge of the French social security system and are not required to declare your pension income in box TL on form 2042.

In effect, this means that anyone with a form E121 MUST not enter their pension income in box TL on form 2042. If they do, they will be charged CRDS. You must still pay these levies on other unearned income.

Hope this helps.

By the way, where have you seen the ruling about not paying any Social Levies if you are not in CMU?

 

[Ron Avery]

Rothrugby That is also my understanding of how it works. 

 

However, for clarity I think this line should read :

CRDS -  is payable on total income, less allowances, including state or private pensions from the UK that are taxed in France

[sunshine 2]

Rothrugby - we have not seen any ruling about not paying social levies if not in CMU 9 ( therefore having more money available to pay social charges)  This seemed to come from Chessfou on the first page of this topic.  I think its now clear to me that even if people with PHI are viewed as being equivalent to those with an E form, the possible saving is fairly insignificant and is not going to assist them in paying for PHI.