Following the Social Security Financing Act of 2016, non-residents are once again subject to CSG (Contribution Sociale Généralisée) and CRDS (Contribution pour le Remboursement de la Dette Sociale) social charges at a rate of 15.5% on their net rental income from furnished or unfurnished properties in France.
Reimbursement of social contributions paid by non-residents before 1 January 2016
In a judgement concerning the “de Ruyter” case (February 26, 2015), the ECJ (European Court of Justice) ruled that the imposition of French social contributions on foreign tax residents did not comply with the applicable European legislation.
To circumvent the effects of this case law judgement, the Social Security Financing Act of 2016 subsequently provided for a reallocation of social contributions in favour of financing bodies with no direct links to the French Social Security system.
It should be noted that this does not prevent non-residents from challenging and seeking reimbursement of social contributions levied on capital income (including rents received and real estate gains) from previous years.
Non-residents once again subject to CSG and CRDS on their rental income
Thus, as from 1 January 2016, social levies on capital income, including rental income derived from furnished and unfurnished rentals, and on real estate gains realised on the sale of property in France, are still payable by non-residents, whether they are based in Europe or elsewhere.
This new provision applies to all assessments issued on or after 1 January 2016, which means that non-residents are liable for CSG and CRDS at a rate of 15.5% on 2015 revenues (rents received in 2015 and taxed in 2016) and real-estate capital gains made on or after 1 January 2016.