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Legal Consequences of De Ruyter Judgment

By judgment dated 26th February 2015 the Court of Justice of the European Union, has called into question the levying of social security contributions on capital income arising in France of individuals insured under a social security scheme in another Member State of the European Union (EU) or the European Economic Area (EEA) or in Switzerland, since the proceeds of these levies are intended to fund benefits to which only individuals insured under the French social secu rity scheme are entitled. It is therefore possible to get a refund against such levies subject to the conditions set
out below. It is necessary to remember that until the above decision and its agreement by the French administration, the capital income of a non resident was subject as for a French resident to the payment of general social contributions called CSG and CRDS. Therefore 15,5% were paid on this kind of income including capital gain on real property.
This taxation was a brake to the sale of real estate because it was add to the original taxation of 19%. Thanks to the above judgment this contribution will no more be appl
ied to a non resident who is insured under a social security scheme in another Member State of the European Union (EU) or the Eur opean Economic Area (EEA) or in Switzerland.
Only the 2% solidarity levy will continue to be paid. For instance on a capital gain of € 100, the taxation which was of 34,50
€ is now of 21 € and it is supposed to have been like that before. For taxpayers who have not yet applied to the tax authority, appeals submitted in 2015 will be admissible for the following periods:
– Capital gains from real property: Social security contributions levied from 1 January 2013;
– Levies based on assessment rolls (for income and capital gains on movable capital assets, for instance):
– Levies for which assessments were issued after 1 January 2013;
-Investment income subject to a withholding tax: Social security contributions paid from1 January 2013.
In every case the appeal must be accompanied by proof of the amount of social security
contributions in question, together with proof of the taxpayer’s membership of a social
securityscheme in an EU or EEA country other than France or in Switzerland.
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