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AnOther

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Does anybody know anything about this. If I'm reading it correctly (and I admit that all these abbreviations URSSAF, CSG, CRDS what have you mean very little to me) then my UK Tax & NI paid salary will now no longer go down as 'exonerated' but be libel to 5.5% tax in France too, as if there are not already enough buggers nibbling at my income [:'(]

Or does it just mean in this specific circumstance where some slimy lawyers are trying one on, I suspect not else why the sentence about foreign pensions not being subject - for now. That would be the last straw for many [:-))]

French Social Levy on Foreign Earnings

A new social levy has been imposed on foreign earnings for those resident in France, writes Virginie Deflassieux of French tax advisors, PKF Guernsey.

The charge is specific to foreign earned income, either salaried or self-employed earnings.

The new cotisation is calculated as follows:

  • Salaried income: 5.5%
  • Professional earnings: 2.4% up to €34,308; 9.6% between €34,308 and €171,540.

Readers will recollect from my previous article that the French social security collections agency URSSAF, invoking

European regulations, attempted to levy CSG and CRDS charges on the UK

earnings of two French lawyers fiscally resident in France who practise

in France and in the UK.

The lawyers opposed this assessment on the grounds that, under

the terms of the France UK Double Taxation Treaty, their UK earnings

are not subject to French income tax, and thus should also be exempt

from the CSG and CRDS charges.

The case went to the European Court of Justice whose ruling

was not entirely clear-cut, leaving it to Member States to determine

what income should be included for social security.

As a result, the French Government has now passed legislation

to more clearly cover those in similar circumstances as the two

claimants, who, whilst fiscally residing in France, carry out a

professional activity in France and abroad.

The French Government argue that the reason for introducing

the new charge is to ensure parity between those with purely French

based income, and who pay the social levy on all their income. As those

resident in France receive all the benefits of the French social

security system, they consider it is only fair that they should pay

social charges on all their income.

This cotisation will be treated as part of mainstream

French social security charges, and so, unlike the CSG and CRDS, it is

excluded from any double tax treaty exemption. We have asked the

authorities to confirm whether the charge would be authorised as a

deduction from the taxpayer’s total taxable income and we await their

reply.

Luckily, the authorities have refrained from extending the new charge to foreign pensions.

Those living in France on a pension taxed elsewhere in the EU

do not suffer the payment of social charges on their pension as they

obtain double taxation relief. For now, at least, this will continue to

be the case.

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[quote user="ErnieY"] As a result, the French Government has now passed legislation to more clearly cover those in similar circumstances as the two claimants, who, whilst fiscally residing in France, carry out a professional activity in France and abroad.

[/quote]

I dont know exactly your situation but suspect that you dont carry out a proffessional activity in France. In any case you are well down  their list of suspects after the lawyers etc etc.

You could of course go along and volunteer to pay it [:D]

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The legal texts are here:

The [url=http://www.securite-sociale.fr/chiffres/lfss/lfss2009/2009_plfss.pdf]Projet de loi de la financement de la sécurité sociale pour 2009[/url] (LFSS)was issued by the Department of social security and put before the council of ministers.  The relevent section comes under Article 21.

The LFSS was enacted and published by the [url=http://www.legifrance.gouv.fr/affichTexte.do;jsessionid=F31D709CC4DF7A3C5F96C7FFE9944B62.tpdjo05v_3?cidTexte=JORFTEXT000019942966&dateTexte=20090116]Official Journal[/url] on 18 december 2008.

However, Article 21 of the published LFSS merely references to a decision by the consitutional council on 11 December which declares that Article 21 was contrary to the constitition.

Mmmmm........

 

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Hi,

   Two points strike me -the 2 lawyers (presumably french nationals), are affiliated to the french social security, therefore they would not,I think, pay NI on their UK professional fees; if this is so then the application of the new cotisation (it is set up NOT to be seen as a tax) would seem justifiable in this and similar cases.

   As regards the sinister hints about pensions , anyone on an E121 is not affiliated to the french social security, and so ,in my view their state pension cannot be subjected to what amounts to a complementary cotisation to that system. That does not mean that they will not try it on, but in the case of E121 holders it would seem to be that it would fall to be paid by the UK government . I think that as their total cost to the french health system is presently accepted as being covered by the UK's E121 payments,all their other income should also be exempt.

     In the case of non-E121 holders who are affiliated to the french system, and have some UK earnings , the french cotisation would only be fair if their UK earnings were exempted from NI.  In the case of people with private pensions, who are on the CMU, they are already paying a cotisation based ,among other things on those pensions .

      In the case of recent arrivals who provide their own health cover by means of private insurance, such a cotisation would be clearly unjust.

      As result of  all these possible complications, I think the french will decide to leave all pensions alone. If they don't I think appeals to both Brussels and the UK government  could be made based on the arguments set out above.

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This is the relevant bit in French (Thanks to SD for the useful links)

Toutefois un vide juridique subsiste pour les personnes qui exercent une activité

professionnelle à la fois en France  et à l’étranger. En effet, afin  d’éviter les situations de double

mposition, les conventions fiscales internationales prévoient que, dans ce cas, les revenus perçus à

’étranger sont imposables dans le pays où ils ont été perçus, les  intéressés n’étant imposables en

France que sur leurs seuls revenus perçus en France.

Il en résulte que les personnes  concernées sont, du fait de leur activité professionnelle en

France, assujetties aux régimes d’assurance maladie dont elles perçoivent l’intégralité des

prestations, sans pour autant acquitter la CSG et la CRDS sur l’intégralité de leurs revenus

professionnels, les revenus perçus à l’étranger échappant à ces deux contributions.

Dès lors, le présent article vise à faire acquitter aux intéressés, sur la partie de leurs revenus

non imposables en France, une cotisation d’assurance maladie d’un taux particulier (2,4 % dans la

imite du plafond de la sécurité sociale et de 9,6 % dans la limite de 5 plafonds), afin de rétablir

’égalité de traitement entre tous les ressortissants des régimes concernés.

So it's for people who have French Social security cover under one of the "Régimes' (such as the régime générale de travailleurs) but because they work part of the time in France, but who have escaped paying  CSG and CRDS on the part earned abroad.

I don't think it is for people who don't have Securité Sociale under one of the standard régimes i.e. people who work in the UK but not in France.

I don't see anything about UK pensions in the texte, so I think it is an invention of the journalist.

I have to admit however that I haven't read all the document

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Norman

Just a quick point...

The text originally posted by ErnieY is not from a journalist.  It's from a senior tax manager employed by the Guernsey office of one of the UK's Big Four tax partnerships.  She is highly respected and her tax advice is always solid.

I agree with your analysis (and that of Parsnips)- according to existing tax law, foreign earnings and pensions are subject to social contributions if the individual is 'a la charge' of the French assurance maladie.  The French lawyers will have been so through their contributions arising from their French income, so they should be liable to SC's on their UK income, regardless of any Dual Taxation treaty issues.

People living in France but working in the UK are likely to be covered by the appropriate E-forms, therefore their assurance maladie is covered by the UK. 

As you say, it's needs further study, but I can't see any immediate significant change for people here.

Watch me be proved wrong....[:P]

 

 

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