Ruyter Ruling: the Tax Authorities Explain how to Recover Social Security Contributions

Wealth planning - 11/3/2015

In a press release dated 20 October 2015, the General Directorate of Public Finance (Direction générale des Finances publiques / DGFiP) explains to resident and non-resident individuals how to recover social security contributions.

Extract of the Press Release
The decision by the Council of State of 27 July 2015 relating to the Ruyter case, following the ruling by the Court of Justice of the European Union of 26 February 2015, has called into question the levying of social contributions on income from capital in France, on persons who are subject to the social security legislation of another Member State of the European Union (EU) or of the European Economic Area (EEA) as well as Switzerland.

The proceeds from these contributions are intended to fund services that benefit only persons insured under the French social security scheme.

Accordingly, the contributions levied can be claimed back on the following terms.

Persons and income concerned
These decisions apply to persons who are subject to the social security legislation of a country other than France situated in the EU, EEA or Switzerland:
- for persons domiciled in France: the social security contributions on all income from capital taxable in France (income from investments and assets) and assigned to the budgets of social welfare agencies;
- for persons domiciled outside France: the social security contributions on real estate income (real estate capital gains and real estate income) levied on property situated in France and assigned to the budgets of social welfare agencies.

It should be noted that the 2% solidarity contribution due before 1 January 2015, as it does not fund social welfare measures, is not affected by the Ruyter ruling. It is therefore not recoverable.

The periods concerned
For taxpayers who have not yet petitioned the tax authorities, claims submitted in 2015 will be acceptable within the following limits:
- for capital gains on real estate: claims for social security contributions settled spontaneously from 1 January 2013;
- for tax recovered via assessment (mainly income from real estate, capital gains on investments): taxes for which the assessments were issued from 1 January 2013;
- for investment income that has been subject to withholding, claims relating to social security contributions paid since 1 January 2013.

The periods concerned
- for persons who paid social security contributions when paying capital gains tax on the sale of a real estate asset: if they have not already done so, they can now file their claim at any time with the departmental public finance office (direction départementale des finances publiques) in the département where the sale was registered;
- for persons who paid social security contributions on income from assets (real estate income, investment income, non-professional industrial and business profits, etc.): they can file their claims with their usual tax office (the personal tax office indicated on the tax assessment for residents in France or the local government personal tax office (DRESG) for non-residents).

Claims relating to 2014 income can be filed once the tax assessment notice for 2015 is received.

Claims can be submitted online at > Particuliers > Réclamer, or by post, attaching all of the necessary documents.

In all cases, the claim must be accompanied by proof of the amount of the contested social security contribution as well as proof of the taxpayer's membership of a social security scheme in a country other than France in the EU, EEA or Switzerland.

Furthermore, to verify that the contested social security contributions were applied to the income of a member of a scheme outside France, the claim must include all elements that can identify its owner (property belonging to the person not a member of a French social security scheme, matrimonial status of the petitioner, indivisible property jointly held by a member of a French scheme and a member of a non-French scheme, etc.);
- for social security contributions on investment income and withheld at source in particular by credit establishments or insurance companies (regulated savings passbooks and accounts, dividends, interest, life insurance policies, etc.): the procedure for filing claims is in the process of being defined and will be communicated shortly.

Elément complémentaire