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French Property Owners –Tax on rental and sales profits

Posted by Chez de Chez on October 26, 2015
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For non-French residents

The ECJ ruled earlier this year that it was illegal under EU law to levy French social charges of 15.5% on income gains generated by non-French EU residents, from rentals, or sales of their French property.

Most of us then thought the judgement made by the Conseil d’Etat, France’s highest administrative court on the 27th July 2015 that, ‘non-residents, in other EU member states, should not pay social charges on income from property’ would be the closing chapter.

However, we’d not considered the creativity of the French authorities and that another way to deduct this money would be found. Currently the social charges are classified as a cotisation (contribution) but are likely to soon be classified as an impot (tax) and the status change means that non-resident French property owners will still have to pay them.

This is at the proposal stage but it is expected to be passed into law very soon and widely rumoured to take effect from January 2016.

Non-residents who paid this levy under the cotisation system should speak with a tax specialist for further information as to whether they can make a claim.

Now we have to hope that another challenge is made as to the legality of this new tax to French property owners.

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