U.K. French taxation

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U.K. French taxation


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Old 13th July 2020, 09:18 AM
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Default U.K. French taxation

Interesting discussion with people recently about the liability for French social charges (CSG/CRDS) for working (I.e. not retired) Brits living (I.e. tax residents) both in France and the U.K. with all income earned in the U.K. The claim was that they had no liability to CSG/CRDS because the British/French tax treaty eliminates double taxation. The claim was also made, that CSG/CRDS would only be due if they joined the Sécu.

To me, the first claim seems wrong, but might possibly be true, because of EU rules on healthcare, S1s, etc. The second claim seems, based on several posts on this forum and my own queries and experience, to be clearly specious.

I will add one more question... whatever the current situation is, is it likely to change after 31/12/2020?

Thoughts?
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Old 13th July 2020, 09:34 AM
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Social charges would be covered by the social security treaty not the tax treaty. Problem is all those UK /EU country treaties tend to be from 1973 or something. They may need updating.
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Old 13th July 2020, 09:39 AM
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I would like to know this, too, because what happens in practice is sometimes hard to tie up with the regulations as they are writ.

I don't think that the DTT argument holds any water because I don't think social charges are classed as an income tax.
I thought that the exemption for S1 holders only applied to their pensions and certain other sources of income.

My only experience of it was one year when I had a very small amount of UK income. My avis for that year showed a minimal amount of social charges due, I think it was around 20 euro, and it was written off as being too small an amout to be collected. This was many years ago, though, and I think the rules have changed several times since then.

If and when I come back to France, I'll be in receipt of a small annual annuity (is that a tautology? are all annuities paid annually?), and I expect to have to pay social charges on it. Though it would be nice if I didn't.

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Old 13th July 2020, 09:44 AM
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Originally Posted by NickZ View Post
Social charges would be covered by the social security treaty not the tax treaty. Problem is all those UK /EU country treaties tend to be from 1973 or something. They may need updating.
I don't think so because they're not really much to do with social security.
They're more of a tax by another name.
As I understand it they do include an element that goes towards the health infrastructure, but they also go towards paying off France's national debt and supporting various social initiatives such as electricity subisidies for the DomToms and I believe certain pension schemes for civil servants.
This seems to explain it if you have time to read it (may be out of date though)
https://placement.meilleurtaux.com/p...tion%20sociale.


Last edited by EuroTrash; 13th July 2020 at 10:01 AM.
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Old 13th July 2020, 09:51 AM
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Quote:
Originally Posted by EuroTrash View Post
I don't think so because they're not really much to do with social security.
They're more of a tax by another name.
As I understand it they do include an element that goes towards the health infrastructure, but they also go towards paying off France's national debt and supporting various initiatives such as electricity subisidies for the DomToms and I believe certain pension schemes for civil servants.
This seems to explain it if you have time to read it (may be out of date though)
https://placement.meilleurtaux.com/p...tion%20sociale.
Maybe this will help - looks like you might have to pay 0.5% CRDS.
https://www.economie.gouv.fr/particu...neralisee-csg#
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Old 13th July 2020, 10:14 AM
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The CSG/CRDS is not a "cotisation" in the sense that it's what you pay to be enrolled in the French social insurance system. And, for a long time, the US government wouldn't allow you to offset CSG/CRDS against your US tax liability using the Foreign Tax Credit because they claimed it wasn't an "income tax." That has changed.

There is no CSG/CRDS charged against US pensions (US SS and IRAs and other deferred tax pension plans). But, there is a "partial" rate charged against my German pension - either 8 or 9% IIRC.

At this point, who knows what the situation is for the Brits and this "cotisation." But I guess they'll find out.

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Old 13th July 2020, 10:37 AM
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...At this point, who knows what the situation is for the Brits and this "cotisation." But I guess they'll find out.
Well, that is exactly how I felt during the conversation. Every attempt to suggest that perhaps things might be changing or the situation might not be exactly as they thought was met with “you’re not British how could you possibly know.”

Ironically, the discussion started when someone mentioned an English friend who lived in Asia who wanted to be able to freely visit his French house. It had been suggested that he should file for the withdrawal agreement CDS. It was at that point that I commented if he was a French resident he would be liable for French taxes, or at least filing them… And yada yada yada

Que sera sera

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Old 13th July 2020, 10:46 AM
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There's two sides to it aren't there, there's the French rules on who is liable to pay the tax on what sources of income, which I think are the same across the board regardless of nationailty? and then there are each individual country's rules on how that meshes with their DTT with France and how their tax office interprets social charges, whether it classes them an income tax or not. I think that at present HMRC doesn't.
But I could be totally wrong. I have tried several times to get my head round this, but I'm not there yet - just when I think I have, something pops up and proves me wrong.
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Old 13th July 2020, 11:18 AM
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There is an element in the Anglo French tax treaty that eliminates CSG etc from being paid on UK govt occupational pensions As I said on another thread I do not pay CSG etc on the work I do in the UK because I have always thought and that was how it was described to me by our local tax office that I did not reach the threshold for CSG bearing in mind the largest part of my income is exempt THe work neccesitates my physical presence in the UK
The table provided by EH seems to confirm this.
However of course there are still Brits and others who do not fully understand their tax liabilities here in France if they are remote working etc
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Old 13th July 2020, 11:26 AM
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Quote:
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...there are still Brits and others who do not fully understand their tax liabilities here in France if they are remote working etc
indeed. This case, in particular, was interesting in that the person really only wanted a second, holiday, home in France. But, was willing to become a fiscal resident to be able to enjoy unfettered access to that home.

BTW, Whether or not they would actually end up spending the required 183 days per year in France to keep their withdrawal agreement CdS valid is another question.

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