CSG and CRDS are taxes imposed on all income earned in France. For earned income they are collected as part of the social charges, either mentioned on the employee pay slip or included in the social charges for self-employed people. For all other types of income, notably investment portfolio income, the tax office sends a CSG-CRDS bill after all income is declared and the amount of taxes has been calculated.
The tax office has not taken into consideration the situation of foreign unearned income and has issued tax bills related to CSG-CRDS on such income. It was always possible to contest the bill and eventually have it declared void. But many people did not know this and assumed that they had to pay it.
The European Court of Justice ruled on February 26th 2015 that in so acting, the French tax office was illegally collecting money that was not owed and was defrauding people. The French government should reimburse these taxes, and one would hope that the software used to calculate them will be modified so it can take into consideration the origin of unearned income.
By Jean Taquet
Jean holds a master’s degree in commercial and civil law from the Sorbonne University. He served as a French “officier juriste” and graduated from Saint Cyr de Coëtquidan in the French Army. He has also been a teacher at W.I.C.E. and a speaker at the OECD. Since 1997 he has been a consultant in cross-cultural practical issues of all kinds confronting expatriate families residing in France.