French Capital Gains Tax Refunds for Non-EEA Residents
Thursday 02 July 2015
Non-Residents living outside of the EEA who sold property in France in 2014 are entitled to apply for a refund of overpaid capital gains taxes.
Last February we reported on a ruling of the French Supreme 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.
Until now, such individuals have been taxed at the rate of 33.3%, whilst those from within France and the EEA are 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 rate applies to all individuals, whether or not the property is owned through a French property company (Société Civile Immobilière), but it excludes corporate bodies taxed through the system of company taxation.
The new uniform rate applies from 1st January 2015.
However, given that the court ruling occurred in 2014, it is open to former owners who sold in 2014 to make a claim this year for a refund of overpaid taxes.
Such claims now appear to be meeting with some success for last month one reader from Australia was granted a refund of €13,000 on a capital gains charge of nearly €30,000 he had paid on the sale of his property near Cahors.
The refund was granted on the basis of a claim submitted by an avocat fiscaliste to whom we referred the case.
If you think you may be entitled to a refund, and seek professional assistance in the submission of a claim, contact us at firstname.lastname@example.org.
Social Charges - EEA Non-Residents
By way of an aside, the French government have yet to make a decision on a refund of social charges on the rental/investment income and capital gains of EEA non-residents.
Before they can do so the matter has to be considered by the Conseil d’État, who will themselves consider the European Court of Justice ruling made earlier this year.
The ruling of the Conseil d’État itself is anticipated within the next couple of months.