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Heads up for another tax/social charge collection change.


tinabee

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Just spotted this on another expat news website:

"From 2012, the CSG on non-French pensions or salaries will be levied by the local tax office and not the URSSAF"

so expect more confusion again this year as the change will no doubt be implemented differently accross the country

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And about time too. Whatever the implications for individuals on this forum, the current system has always seemed to me to be totally *rse about face. 

I do find French Propety.com to be very good (was that who you meant by FPK, Tina?) - I got to know the editor a bit and he a) knows his stuff and b) doesn't often publish before getting his facts as straight as is possible.

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Hi,

    This may have some relevance (from my post on another thread);

 

 08/02/2012, 10:52

parsnips

Joined on 28/08/2008

Posts 812

Re: Do french people working in Switzerland have to pay taxes?

Hi,

    Not only do they in most cases pay no

french tax , but if they have social contributions deducted from their

foreign pay they pay no CSG and CRDS on it either.      It was as an

indirect result of the introduction of this CSG exemption (against

french official opposition) that UK pensions were also exempted.    At

the time the french argued that the social charges were in fact a tax

and should be paid by all residents , the European Court ruled that they

were what they said they were , a contribution to specific benefits and

if the resident was paying (or in the case of UK pensioners-had paid)

these elsewhere , they would not be required to pay again in France. 

The reason behind this was EU regulation 1408/71 as amended by EC

/883/2004 which rules that a person can be subject to only one social

security regime at any one time.

     Problems could arise (see

thread "Heads up......") for UK pensioners if the CSG is merged with

income tax , as the argument that it is a benefits - targeted

contribution could no longer be made, and those pensions which are taxed

now , but free of CSG , like the OAP and others received by S1 holders ,

would presumablybecome subject to the combined tax.

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"Problems could arise (see

thread "Heads up......") for UK pensioners if the CSG is merged with

income tax , as the argument that it is a benefits - targeted

contribution could no longer be made, and those pensions which are taxed

now , but free of CSG , like the OAP and others received by S1 holders ,

would presumablybecome subject to the combined tax."

1)I can see that the OAP which is received free of tax could be subject to this tax, but what about those taxed at source in the UK? Would they still be exempt under the double tax treaty? It is after all a Tax.

2) If the OAP were subject to the tax it would bring it into line with French pensioners who continue to pay CSG, but not côtisations on their income.

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Hi,

     In my opinion income taxed in the UK at present under the treaty (govt. pensions and rents), would continue to be exempt in France under the same articles of the treaty .  In fact the situation would be less ambiguous than now (viz. last years c**k - up over CSG on those exempt incomes ), as all the french impositions would be classed as income tax , so there would be a direct equivalence between the two countries.

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[quote user="cooperlola"]

And about time too. Whatever the implications for individuals on this forum, the current system has always seemed to me to be totally *rse about face. 

I do find French Propety.com to be very good (was that who you meant by FPK, Tina?) - I got to know the editor a bit and he a) knows his stuff and b) doesn't often publish before getting his facts as straight as is possible.

[/quote]

Hi cooperlola, I agree about FrenchProperty.com - very good. However in this case it was http://www.pkfci.com/ (tax & business advisers based in the Channel Islands) who wrote the article in the link.

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[quote user="French Property"]   

The UMP is coming at it mainly as a response to the huge debt burden faced by France, and the need for a greater number of households to make a contribution towards the reduction in debt.

At the present time, around half the households in France do not pay income tax, although the net for social charges is cast a lot wider.
[/quote]

This is aimed at the wrong people. They are going to try squeezing harder to extract a minimum from those who are on the radar, and quite frankly, are struggling already to pay their way.

They should be aiming more at those households who don't pay income tax because they work "off the radar". All the french artisans who have done work for me, all, without question, wanted paying on the black. Maybe if people paid their way the country wouldn't be in such a mess. The same argument applies to Greece/Italy etc.

 

 

 

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The root of the problem is that the state takes too much from people who do not earn a lot and thus encourages the parallel system. Had the present government made real efforts to reduce spending and not just those examples in the headlines, as well as spreading the load fairly then people might be prepared to pay their fair wack of tax.
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