CSG/CRDS & pvt Insurance - Page 2

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CSG/CRDS & pvt Insurance - Page 2


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  #11 (permalink)  
Old 30th May 2020, 12:55 PM
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Originally Posted by newyorkerinparis View Post
...the American retiree should contest the social charges... ...because, as you point out, the US-French tax treaty provides that American citizens do not pay French taxes on US-source income, and the CSG/CRDS are considered "taxes."

I went through this situation several years ago when I was assessed social charges on my US source income. I disputed the charges before the tax authorities and they ended up agreeing with me and refunding the charges with interest. Their decision clearly stated that the CSG/CRDS were "taxes" and were therefore not imposable on American citizens on US-source income.
Thank you for your response. So, that invites a couple of questions:
  1. How had you reported your US pension income? Had you, as Bev has noted, listed it part 9 for US pensions?
  2. How have you handled this situation to avoid an annual re-occurrence?
  3. Do you have any (redacted) documentation from your dispute you would be willing to share?
And, I also have a more general, philosophical question. Assuming an American retired in France, with no French taxable income, is not obligated to pay the social charges, how do/should they go about contributing to the support of the system they benefit from?

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  #12 (permalink)  
Old 30th May 2020, 01:36 PM
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Thank you for your response. So, that invites a couple of questions:
  1. How had you reported your US pension income? Had you, as Bev has noted, listed it part 9 for US pensions?
  2. How have you handled this situation to avoid an annual re-occurrence?
  3. Do you have any (redacted) documentation from your dispute you would be willing to share?
And, I also have a more general, philosophical question. Assuming an American retired in France, with no French taxable income, is not obligated to pay the social charges, how do/should they go about contributing to the support of the system they benefit from?
1. I'm not retired, so I don't have any pension income. My US-source income was from dividends and interest.

2. I haven't done anything any differently to avoid an annual reoccurrence. I'm assuming that there must be a record in my file that I contested the charges successfully.

3. The key paragraph from the tax conciliator's letter to me was as follows:

Conformément à la jurisprudence du conseil constitutionnel, la contribution sociale généralisé (CSG) revêt le caractère d'un impôt de toute nature au sens de l'article 34 de la constitution. Ainsi, pour l'application des conventions fiscales conclues par la France en matière d'impôt sur le revenu, celle-ci considère généralement la CSG et la contribution pour le remboursement de la dette sociale (CRDS) comme des impôts sur le revenus dans le champ d'application des conventions. Dès lors, les dispositions de la convention franco-américaine du 31 août 2014 en matière d'élimination des doubles impositions trouvent à s'appliquer.

As to your philosophical question, one option would be to make voluntary contributions. For example, you could donate to organizations like la Fondation Hôpitaux de Paris - Hôpitaux de France.

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Old 30th May 2020, 02:14 PM
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Originally Posted by newyorkerinparis View Post
...3. The key paragraph from the tax conciliator's letter to me was as follows:

Conformément à la jurisprudence du conseil constitutionnel, la contribution sociale généralisé (CSG) revêt le caractère d'un impôt de toute nature au sens de l'article 34 de la constitution. Ainsi, pour l'application des conventions fiscales conclues par la France en matière d'impôt sur le revenu, celle-ci considère généralement la CSG et la contribution pour le remboursement de la dette sociale (CRDS) comme des impôts sur le revenus dans le champ d'application des conventions. Dès lors, les dispositions de la convention franco-américaine du 31 août 2014 en matière d'élimination des doubles impositions trouvent à s'appliquer. ...
Ah. Thanks again. So, I think I have found the wrinkle here. In your case, you were clearly right. However, in case of US pension income the situation becomes a bit trickier.

Looking at the US/French tax treaty it states in Article 18, Pensions, Para 1:[quote1, ](a) except as provided in subparagraph (b), pensions and other similar remuneration, including distributions from pension and other retirement arrangements, derived and beneficially owned by a resident of a Contracting State in consideration of past employment, whether paid periodically or in a lump sum, shall be taxable only in that State:
1, (b) pensions and other payments made under the social security legislation of a Contracting State to a resident of the other Contracting State shall be taxable only in the first-mentioned State.
[... ...]
(c) Payments received by a beneficiary in respect of an arrangement referred to in
subparagraph (a) that satisfies the requirements of this paragraph shall be included in income for tax purposes of the Contracting State of which the beneficiary is a resident, subject to the provisions of Article 24 (Relief from Double Taxation), when and to the extent that such payments are considered gross income by the other Contracting State.[/quote]Unfortunately, there is no google translate for legalese. But, this seems to say to me that:
  • Income earned from US pensions is taxable only in the US.
  • Sub-paragraph 1, (b) seems to say if the US pays a benefit to a French Resident it is only taxable in the US.
  • and 2, (c) seems to say pension income taxed in the US is protected against double taxation.
so, it is looking like, as usual, the advice from the resident accountant, aka Bev, is likely correct and pension income should not be reported under section 8, Divers.


Last edited by berkinet; 30th May 2020 at 02:18 PM.
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  #14 (permalink)  
Old 30th May 2020, 02:26 PM
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I can't comment on where pension income should be reported, since I've never had to do that myself. But as far as the issue of double taxation is concerned, the principle seems to be the same as for US-source investment income: it's taxed only in the US. So, given that the CSG/CRDS is considered a "tax" under French law, you shouldn't have to pay it with respect to income from your US-source pension.

Keep in mind that the local tax authorities aren't always up on all the details of the tax treaties, so the fact that they are asking you to pay the CSG/CRDS doesn't mean they're right (or that you reported your income incorrectly). In my case, the front-line people at the tax office insisted that I had to pay the CSG/CRDS on any investment earnings, regardless of their source, but once the higher-ups got involved everything was sorted out.

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Old 30th May 2020, 03:03 PM
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Originally Posted by berkinet View Post
Ah. Thanks again. So, I think I have found the wrinkle here. In your case, you were clearly right. However, in case of US pension income the situation becomes a bit trickier.

Looking at the US/French tax treaty it states in Article 18, Pensions, Para 1:[quote1, ](a) except as provided in subparagraph (b), pensions and other similar remuneration, including distributions from pension and other retirement arrangements, derived and beneficially owned by a resident of a Contracting State in consideration of past employment, whether paid periodically or in a lump sum, shall be taxable only in that State:
1, (b) pensions and other payments made under the social security legislation of a Contracting State to a resident of the other Contracting State shall be taxable only in the first-mentioned State.
[... ...]
(c) Payments received by a beneficiary in respect of an arrangement referred to in
subparagraph (a) that satisfies the requirements of this paragraph shall be included in income for tax purposes of the Contracting State of which the beneficiary is a resident, subject to the provisions of Article 24 (Relief from Double Taxation), when and to the extent that such payments are considered gross income by the other Contracting State.
Unfortunately, there is no google translate for legalese. But, this seems to say to me that:
  • Income earned from US pensions is taxable only in the US.
  • Sub-paragraph 1, (b) seems to say if the US pays a benefit to a French Resident it is only taxable in the US.
  • and 2, (c) seems to say pension income taxed in the US is protected against double taxation.
so, it is looking like, as usual, the advice from the resident accountant, aka Bev, is likely correct and pension income should not be reported under section 8, Divers.[/QUOTE]

Were you a US lawyer in another life? French law (including tax law) really does work differently.

OK, what I know of how you're "supposed to" fill in the French declaration forms comes from using ClickImpot for the last 10 or more years now.

To report your US pensions (US SS and IRA or similar distributions), you report the amounts received (gross - before any taxes paid or withheld by the US) on lines (boxes?) 1AL and 1BL of your 2042. (AL is for the primary taxpayer, and BL is for the spouse). These lines are titled: Pensions perçues par les non-résidents et pensions de source étangère avec un crédit d'impôt égal à l'impôt français.

The total of your US SS and IRA should then appear in section 8, line 8TK.

Then, on form 2047, you put the same amounts on the first page, section 1 where it says "Pensions, Retraites, Rentes." Then you put the same amounts in section 6 (Revenus Imposables Ouvrant Droit à un Crédit d'impôt égal à l'impôt français" - and in the space that says "Nature du revenu" I label US SS and IRA and indicate Art. 18 tax treaty (because once the tax office called to ask me what it was - she seemed very happy when I cited Art. 18 of the tax treaty, so I make it easy for them now every year). Put nothing else on the following sections of form 2047.

If you miss putting your pensions on any of those spaces on your tax forms, you risk having them assess you incorrectly - either asking you to pay tax on your US SS and IRA, or you risk having them assess you CSG. Similarly, if you put the amounts on the wrong lines where they don't belong, you run the risk of being improperly assessed.

And, I can recommend getting a copy (next year) of the ClickImpot software if you want to learn for yourself about doing your taxes. It's not quite as "easy" as the dialog formats they use on some of the US tax software (and it's in French) but it does offer you some very detailed reports on how they calculate your taxes from the information as you have provided it - so it's possible to find your errors and correct them before you send the forms in.

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Old 30th May 2020, 03:13 PM
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Add-on question: when social charges are assessed (I.e. foreign retirees) are those charges for services delivered in the same year as the tax filing (I.e. a year in arrears), or for the following year (the year in which the tax forms are filed and the social charges paid)?
We're retired and all of our income is retirement income from the United States. We pay no French income tax and no social charges.


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Old 30th May 2020, 03:19 PM
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... Were you a US lawyer in another life? French law (including tax law) really does work differently....
Quelle horreur

Strictly IT (and a bit of organizational development), so I just try to find the logic in something. But, I do recognize the difference between how the law works in France. That is why I knew that newyorkerinparis's experience would be more academic than precedence setting.
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Originally Posted by Bevdeforges View Post
...The total of your US SS and IRA should then appear in section 8, line 8TK.

Then, on form 2047, you put the same amounts on the first page, section 1 where it says "Pensions, Retraites, Rentes." Then you put the same amounts in section 6 (Revenus Imposables Ouvrant Droit à un Crédit d'impôt égal à l'impôt français" - and in the space that says "Nature du revenu" I label US SS and IRA and indicate Art. 18 tax treaty
THANK YOU . That was the piece I was missing. We had put the pension income in 8TV instead of adding it to ordinary income in 8TK.

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Old 30th May 2020, 03:32 PM
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That was the piece I was missing. We had put the pension income in 8TV instead of adding it to ordinary income in 8TK.
I think I did that one year, too (though before I retired - so I screwed up on my "salary" income).

I find it really confusing to figure out all the different places they seem to want you to list the same income - sometimes just the same numbers. That's why something like ClickImpot is such a blessing. (Though the first year or two using it you will be tearing your hair out - more proof that French minds really do seem to work differently somehow from anglo-saxon ones.)

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Old 30th May 2020, 04:14 PM
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We had put the pension income in 8TV instead of adding it to ordinary income in 8TK.
I have an accountant. She does that for me, and she does it in French.

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Old 30th May 2020, 06:17 PM
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I think I did that one year, too (though before I retired - so I screwed up on my "salary" income).

I find it really confusing to figure out all the different places they seem to want you to list the same income - sometimes just the same numbers. That's why something like ClickImpot is such a blessing. (Though the first year or two using it you will be tearing your hair out - more proof that French minds really do seem to work differently somehow from anglo-saxon ones.)
When I was tearing my hair out with all the changes last year and as the due date was getting a bit too close for comfort, I decided to try ClickImpot. But it was really too late and I didn't have time to trawl through all the instructions, so I went back into the Impots site and lo and behold came across all the instructions as I went through and redid everything, plus they were, at least for me, far more intelligible than ClickImpot - half an hour or so and I was done, though admittedly I still didn't even attempt to do the CSG/CRDS bit. Oh well, I wasted a bit of money, my bad though and I won't be doing it again. But frankly, if anyone chooses to go that route, I recommend they do so as early as possible and not leave it until the due date is approaching. Oh, and the Impots site, if you complete the forms in the right order, automatically adds relevant input together and puts the result in the right spot. Though of course either way of completing the declaration is difficult for those who don't have reasonable French.

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