Members of Parliament discuss taxation of expatriates

In response to pressure from French deputies from abroad, a fact-finding mission has been set up at the French National Assembly to examine taxation and social protection for expatriates.

A tax that has been maintained for years despite repeated warnings of its legal fragility. The resemblance between the dispute over the CSG for non-residents and that over the 3 % tax on dividends, which hit the headlines this autumn, is not accidental. The same ingredients are present, reflecting weaknesses in our tax governance. A provision voted in during the tax fever of summer 2012, exasperated taxpayers ready to go to court, European justice increasingly interfering with national provisions. "Once again, we're burying our heads in the sand, with a legal carapace".deplores Anne Genetet, MP for the French abroad.

The financial implications of the CSG for non-residents are nothing like the 10 billion euros of the 3 % tax on dividends. We're talking about 250 million euros collected each year by the State, although the bill could end up being a hefty one if the litigation drags on for more than a decade.

What sets this case apart is the number of complaints received. According to a report by French deputy Christine Pires-Beaune (PS), published on the occasion of the Finance Bill, the administration received over 59,000 claims, of which 44,000 were processed. This is putting a strain on the cash flow of non-residents in Noisy-le-Grand, which is not designed to handle these large-scale refunds.

Reset

During the latest debates on the Social Security budget, the government closed the door on the abolition of social security contributions on non-residents, as requested by the deputies of the French abroad. Faced with their pressure, the Minister of Solidarity and Health, Agnès Buzyn, has nevertheless accepted the principle of an information mission at the Assembly to review the issues surrounding the taxation and social protection of French nationals living abroad. The mission's work should be submitted this summer.

"There's a tendency to think of expatriates as spoiled brats, but there's a total misunderstanding of what the French abroad are all about."defends Anne Genetet. The Singapore-resident MP points out that the French abroad are not always executives sent by their companies, but often students or teachers. Social benefits are not always equivalent to those available in France: "In our countries, we don't contribute to pensions, we capitalize".she illustrates

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