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The general social contribution (CSG), referred to in Article L. 136-1 of the Social Security Code, was instituted by the finance law of 29 December 1990.
The CSG is based in particular on income from work and replacement. Persons domiciled in France for the establishment of income tax and who come under a compulsory French health insurance scheme are subject to the CSG. The proceeds from the CSG are allocated to the National Family Allowance Fund, the Old Age Solidarity Fund, the National Solidarity Fund for Autonomy and the compulsory health insurance schemes.
The determination of the legal nature of this contribution has already given rise to several decisions. The Constitutional Council ruled that this contribution was in the nature of a tax levy falling within the category of “taxation of any kind”.
The Court of Cassation, for its part, lays down the principle of the dual nature of the generalized social contribution which constitutes a tax within the meaning of French legislation and a social contribution within the meaning of Community legislation. The Court of Cassation thus clarifies the position adopted since 2000. It thus combines the French conception and the Community conception. The legal nature of social security contributions is therefore clearly limited to the implementation of Community law.
2022 Update:
The debate relating to the legal qualification of the general social contribution – “CSG” – and the contribution for the reimbursement of the social debt – “CRDS” – has found a logical continuation.
In the continuity of the decisions of February 15, 2000, the CJEU, on February 26, 2015, ruled that France could not subject to social security contributions, income from assets and investment income received by natural persons whose tax residence is located in France subject on a compulsory basis to a social security scheme in another Member State.
The new decision of the CJEU, in addition to tax residents of France exercising a salaried activity in another EU Member State who are subject on a mandatory basis to the social security system in the State of their place of activity, also concerns salaried employees residents of France exercising their activity in a Member State of the EEA and in Switzerland. Moreover, this solution should be transposable in the event of affiliation to a social security system of a country that has concluded an association or cooperation agreement with the EU.
To date, the CJEU does not adopt the same reasoning as the Constitutional Council which has long considered that the CSG and the CRDS fall into the category of “taxation of all kinds” referred to in Article 34 of the Constitution. .
Indeed, the CJEU focuses more on the final destination of the two contributions, even if they do not give rise to the right to social benefits, and adds, moreover, that the fact that these contributions are qualified, in France, as levies benefits has no impact on the nature of the deduction under the European regulation.
The French Government has taken note of the judgment of February 26 but has indicated that it wishes to wait for the final decision of the Council of State before making changes to its legislation and in particular to Law 2012-9588, Article 29 of which extended social security contributions to income and property gains from French sources made by non-residents of France for tax purposes.
Pending the reaction of the French Government, taxpayers resident in France for tax purposes who are subject on a mandatory basis to another social security system (Member State of the EU, the EEA or Switzerland), have the possibility of filing a complaint prior to a legal appeal to their tax office in order to request the reimbursement of the social contributions levied by the French State on their income from assets and their investment income.
For tax residents of France, this income includes, in particular, land income, life annuities for consideration, income from movable capital (fixed-income investment products, dividends and similar products), capital gains and real estate, income subject to income tax in the category of industrial and commercial profits, non-commercial profits and agricultural profits which are not subject to social security contributions in respect of professional income and investment products subject to a deduction in full discharge (Treasury bills, bonds, etc.).
With regard to non-residents of France for tax purposes, it should be noted that in 2013 the European Commission opened two infringement procedures against France relating to the CSG and the CRDS levied on property income and on real estate capital gains from French sources. by natural persons, domiciled outside France for tax purposes and dependent either on the social security system of another Member State, or on the Caisse des Français system abroad. In addition, the recent CJEU decision should also apply to income from assets and investment income received by non-residents of France for tax purposes. The income concerned is property income and real estate capital gains from French sources.
Therefore, non-residents of France for tax purposes, pending the corrective measures that will have to be taken by the French Government to article 29 of law 2012-958, also have the possibility of lodging a complaint prior to a legal action. in order to request the reimbursement of social security contributions paid on their income or real estate gains from French sources as soon as they are affiliated to a foreign social security system of a Member State of the EU, the EEA or Switzerland .
Nice lawyer, Grégory Damy , Tax law, update 2022
