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French Social Charges in 2020

The income bands, rates and exemptions for social charges payable in 2020.

The social charges in France are called the prélèvements sociaux, and form part of the general body of social security contributions.

However, unlike the social security contributions per se almost all sources of personal income and capital gains are liable to the prélèvements sociaux, and there is no direct correlation with benefits.

As can be seen from the table below the social charges actually comprise four different taxes, not all of which apply to all income, and in the case of CSG apply at different rates for different income.

Social Charges 2020
Tax
Salaries/Business
Pensions
Investment/Rents/Capital Gains
CSG9.2%
8.3%/6.6%/3.8%*9.2%/0.0%*
CRDS0.5%
0.5%0.5%/0.0%
CASA0%0.3%/0.0%/0.0%0.0%
Prélèvement de Solidarité (PS)
0%
0%
7.5%
Total
9.7%
9.1%/7.4%/3.8%*
I7.2%/7.5%*

*Different rates that apply on pension income, depending on your income. The table below is for 2020, when the reference year used for assessement is 2018 income. The levels are marginally lower for the 2019 (2017 income).

Pension Income Rates 2020
Rate
Single Person
Couple
0%
<€11,306<€17,343
3.8%
<€14,781<€22,673
6.6%
<€22,941<€35,189
8.3%
>€22,941>€35,189

If you are liable, the rate that will be used will depend on your total taxable income, not merely your pension income. That is to say it will apply on your ‘Revenu Fiscal de Référence' as shown on your tax notice. This means that for a couple who are taxed on a joint base a common rate applies, irrespective if one of the spouses could have claimed a reduced rate or exemption.

In addition, the pension income of those who hold an S1 health certificate, government service pensions (teaching profession, local government, civil service, armed forces) and those whose health insurance cover is provided entirely through a private policy is exempt from social charges.

All such persons are entitled to 100% relief against the social charges on their pension income, although in the case of those on a government service pension other pension income remains liable unless exempt under the other provisions eg, S1, low income.

*In relation to investment income, S1 holders and EEA non-residents only pay the solidarity tax of 7.5% on income and capital gains, not the social charges of 17.2%.

Rental income from the UK (and most other countries) is taxable in the UK, with elimination of the social charges applied through a 100% tax credit (crédit d’impôt).

The social charge CSG is partially deductible for income tax purposes.

For whose who pay at the rate of at 8.3% it is 5.9% deductible; at 6.6% it is 4.2%, and at 3.8% it is entirely deductible. The deduction occurs in the year following imposition.

The effect of this rule is that the non-deductible fraction of pension income is included in your income tax assessment.


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This article was featured in our Newsletter dated 15/05/2020




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