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Social fund contributions


oldgit72

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If one becomes French resident either using an E106 or paying for private healthcare is there a liability in respect of contribution (11%?) towards the social fund?  I should add that most income will be in the form of private pension paid from the UK. Also, are there any tax allowances in respect of private healthcare contributions?

 

Thanks

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[quote user="oldgit72"]

If one becomes French resident either using an E106 or paying for private healthcare is there a liability in respect of contribution (11%?) towards the social fund?  I should add that most income will be in the form of private pension paid from the UK. Also, are there any tax allowances in respect of private healthcare contributions?

 

Thanks

[/quote]

Hi,

    I take it that the "social fund contributions" of 11% to which you refer are the CSG, CRDS, and Prelevement Sociale, which together add up to the 11% (since 01/01/09-12.1%).

These are only notionally connected to the healthcare system and are actually just a thinly disguised additional tax on almost all forms of income received by french tax residents.

In your case they will probably be levied  on your private pension when you declare it for income tax in France. It is just possible that some tax offices -mistakenly according to the regulations -may omit to do this, french tax offices operate without much central control.

    At present there are  no allowances for private healthcare contributions, but I believe that representations may be being made to the effect that now that new immigrants are required to provide  such insurance as a condition of residence , it is the equivalent of the social charges paid by salaried workers, and should be deducted from income before tax is applied (like UK NI contributions). To find out more about this I suggest you explore the internet. But at the moment, to my knowledge ,this deduction is not permitted.   

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If you check out the [url=http://www.completefrance.com/cs/forums/1196188/ShowPost.aspx]Tax FAQ sticky[/url] you'll find the answer to your question.

Foreign pensions are exempt from French social charges if you are registered for state healthcare insurance under an E-form or if you have private health insurance. Savings and investment income is subject to 12,1% social charges.

There is currently no tax relief available for private health insurance premiums.

 

 

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[quote user="Sunday Driver"]

If you check out the [url=http://www.completefrance.com/cs/forums/1196188/ShowPost.aspx]Tax FAQ sticky[/url] you'll find the answer to your question.

Foreign pensions are exempt from French social charges if you are registered for state healthcare insurance under an E-form or if you have private health insurance. Savings and investment income is subject to 12,1% social charges.

There is currently no tax relief available for private health insurance premiums.

Hi,

   According to a recent article in "The Connexion", which ,admittedly, is a bit ambiguous, E106 holders are exempted only from contributing to the french health system, while E121 holders are exempt from all social charges on all  their pension income, including private pensions. They say nothing about private insurance .

  There is no mention on the Tax  FAQ of exemption for private health care payers. As I said , it would seem logical and equitable to allow this , but I am not aware of any regulations to that effect.

   It has become apparent recently that the tax authorities are being much more assiduous in applying social charges to all kinds of pensions, in fact, I have read that they are applying CRDS to many pensions which in fact are exempt , and leaving it up to people to make a case for exemption; my personal knowledge of several friends bears this out.

 

 

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I have done a bit of research on this and I would agree that the situation is somewhat ambiguous for early retirees on E106/private pension. What I was hoping for was anecdotal evidence from anyone in this position. If you are that person, please let me know how you are affected.
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The impots tax guidance notes provide the definitive position on the application of social contributions to foreign pensions.  They clearly state that foreign earned income and pensions are only liable to social contributions if they are taxable in France and if the individual is 'a la charge' of an obligatory French health insurance regime.

Both the E106 and the E121 entitle you to register for such an obligatory regime, and in both cases, the state insurance costs are met by the UK so the holder is not 'a la charge' of the French system.  Contrary to the ambiguous comments attributed to that newspaper, there is no differentiation between an E106 and an E121.

Finally, the regulations do provide for people who have private health cover - as they are not registered under an obligatory French health insurance regime they are clearly not 'a la charge' therefore they are exempt.

It's all there in French tax law - no real point in seeking anecdotal evidence...[;-)]

 

 

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Hi again,

       The answers may be in the legislation as SD says , but if you think that makes things straightforward , take a look at    www.french-property.com    the tax guide section on social security -early retirees (7.6.3)    compiled by an international tax lawyer--and she asks for anecdotal evidence of how things go next year!

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That tax guidance section is published by a commercial property company who have a reputation for producing concise and accurate information.  Whilst there is no mention of it being compiled by an international tax lawyer, it does nevertheless confirm the current social charge position relating to foreign pension income.

It would also appear that the request for experiences on the subject actually comes from the editor of the piece, rather than from a tax lawyer.....

This really is a straightforward issue.............[;-)]

 

 

 

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