Have you claimed your French tax refund yet?

November 2, 2023

Categories French Property

Have you sold your French Property in 2021, early 2022 and made a gain? Have you declared a 2021 French income?

We have good news – you could be entitled to a tax refund!

The social security contribution and the social levy on CGT and French income

Since 1 January 2019, individuals affiliated to a social security scheme in an EEA country or Switzerland are exempt from paying the CSG (General Social Security Contribution) and CRDS (Social Security Debt Repayment Contribution) in France.

However, the levy of the social security contributions and the social levy apply to French-source real estate income and capital gains for non-residents for tax purposes.

Reduced social rate for EU taxpayers

Under the provision of EU Regulation, on the coordination of social security system, EU taxpayers selling their French property at a gain or declaring a real-estate income generally benefit from a reduced social charges rate / social levy of 7.5% instead of 17.2%.

Brexit and new social charges rate

From 1st January 2021, following the Brexit, as the UK were no longer part of the EU, taxpayers affiliated to the UK social security system were subject to be taxed at the standard social rate of 17.2% on their French-source real estate income and capital gains.

Let’s switch to the good part!

Finally in 2022, French tax authorities have updated their interpretation of the EU/ UK Trade and Cooperation Agreement of 30 December 2020 regarding the effects of Brexit and accordingly have decided that the reduced social charge rate of 7.5% could be applied to UK taxpayers.

French tax office has also confirmed that the social rate was backdated to the start of 2021.

Consequently, this means that UK taxpayers who sold a French property making a gain in 2021, early 2022, and/ or UK taxpayers who paid tax on their 2021 French income may have overpaid social charges and are entitled to claim a tax refund.

To be entitled to this refund, UK taxpayer needs to be affiliated to the UK NI/Social system.

They have until 31 December 2023 to lodge a claim and 31 December 2024 if they sold their French property in 2022.

If you are unsure whether you are entitled to claim a tax refund; if you believe that you have unduly paid social charges, please do not hesitate to contact our French property and estate team who will be happy to assist you.

Contact Avocat, Deborah Vaysse, in our French property and estates team on 01227 763939 for more information about claiming a tax refund on French property or  French income.