Capital Gains Tax Refunds for Non-EEA Nationals
Tuesday 07 June 2016
A French court has ruled that the claim period for reimbursement of overpaid capital gains taxes by non-EEA nationals is two years, not one year as the government had claimed. Last year we reported on a ruling of the French Supreme Administrative Court (Conseil d’État) that the imposition of a higher rate of capital gains tax on those who lived outside of the European Economic Area was discriminatory and therefore illegal.
Such persons had been taxed at the rate of 33.3%, whilst those from within France and the EEA were taxed at 19%. In both cases social charges at the rate of 15.5% are payable, making a total rate for non-Europeans of 48.8%.
Following the court decision, at the end of last year the government introduced a last minute amendment to the Loi de Finance Rectificative 2014, which harmonised the rate at 19% (plus social charges) for everyone, irrespective of their place of residence.
The new uniform rate has applied since 1st January 2015.
The court ruling opened the way for claims to be made for overpaid capital gains charges.
However, there has been uncertainty over the permitted claim period as the law on the issue is so Kafkasque as to be almost impenetrable.
Broadly speaking, it provides for a claim period of either one year or two years, with a range of different factors that determine whether in a particular case it is the shorter or longer period that applies.
By a narrow interpretation of the law the government have sought to limit the claim period to 31st Dec of the following year of the tax payment.
In a case that recently went before the Conseil d’État a former owner of a property in France, and resident of Japan, challenged the higher rate of capital gains tax imposed on the sale of his property.
The government had successfully appealed the case on the grounds that the claim was time expired.
This decision has now been overruled by the Conseil d’État, who ruled that the claim period should be 31st December of the second year following payment of the taxes. The ruling now leaves the way open for more successful claims.
As a result of the change in the law a number of you have written to us on the claim process. We have referred all such cases to an avocat fiscaliste specialising in this area. A number of cases are now pending,
If you consider that this latest ruling may entitle you to a refund, and you seek professional assistance in the submission of a claim, you can contact us at firstname.lastname@example.org.
This article was featured in our Newsletter dated 07/06/2016