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Refund of social taxes: publication of the practical modalities!

The French tax administration issued on the October 20th, 2015 a communiqué informing individuals of the modalities applicable to claim for a refund of social taxes relating in particular to non-resident individuals who received French source rental income and/or realized French source real estate capital gains since 2012.

The main information is the following:

• – Automatic refund only applies to persons affiliated to the social security regime of an EEA country or Switzerland. The administration makes no reference to non-resident individuals domiciled outside the EU (third-country residents), therefore who are not affected by these automatic refund modalities (a litigation could be considered depending on the circumstances);
• – Automatic refund will apply only to a part of the social taxes: only 13.5% of 15.5% will be refunded automatically. Indeed, the solidarity levy of 2% due before January 1st, 2015 will not be refunded automatically;
• – Claims can be submitted by mail to the taxpayers’ habitual Tax service, or online from the website impot.gouv.fr, section “Particulier”;
• – The taxpayers should enclose with their claim (i) a proof of the amount of the disputed social taxes, (ii) a proof of affiliation to the social security regime of another country than France located in the EU, the EEA or Switzerland and (iii) all information that identify the taxpayer;
• – For real estate properties jointly owned (joint ownership or jointly owned by a couple), it seems that each joint owner / partner should meet the criteria; which is likely to be a challenge when one of the owners cannot prove that he is affiliated to a specified foreign social security regime;

Finally, the specific procedure of refund applicable to French residents already affiliated to a foreign social security regime and earning investment products will be detailed later.