LAREN, The Netherlands, October 30, 2014 /PRNewswire/ --
If it was up to the Solicitor General (SG) of the European Court, British people who have sold their second house in France can have about 50% of the plus-value (capital gains tax) refunded. The SG has advised that the part of the tax that relates to the 15.5% of social security charges, should be declared to be in breach of EU law. When bringing a procedure before the EU court, the SG must first issue advice. Experience has shown that the court accepts the advice of the SG in 90% of the judgments. Therefore, the advice given is of great significance. A large number of the British have a second home in France.
In the case that the French taxation is annulled, all British people who have sold their second home in France (as of August 2012) will be entitled to a refund of 15.5%. This will only apply to those who have filed an appeal on time. For sales that took place in 2012 the deadline for filing an appeal is December 31st, 2014. After the 31st of December, 2014, the right to a refund expires because France does not automatically refund incorrect payments. Those who sold their second home in 2013 have until the end of 2015 to file an appeal.
In 2013, a French Member of Parliament submitted an amendment and the EU commission declared France to be in default. Private initiatives have also been undertaken. Within this context, Ton Steinz addressed the French administration on behalf of a number of sellers. Several procedures were initiated, including a test case for the EU court (Case C-623/13).
The question is whether this social security charge conforms to EU law, which defines that an EU resident can only be subject to social security charges in one state. This is either the state where he lives or works - in the case that he works in a different state. If that is not the case, this obstructs the free movement of people which is in defiance of the EU treaty. In this context 'social security charge' refers to any tax that counts towards the financing of social security.
The decision of the court is expected within a few months. If the decision happens to be negative for France, it is not yet known when France will adjust its legislation. Therefore, there will be many more additional sales affected by the charge. A negative decision will also result in the annulment of this tax on rental income of non-residents. Many British people rent out their French houses. Subsequently, a negative decision will result in an increase to the budget deficit of France by several hundreds of millions.
Note to editors
For more information and a copy of the advice of the SG please contact
Steinz Juridisch Advies Frankrijk
Mr. Ton Steinz
1251 CA LAREN
SOURCE Steinz Juridisch Advies Frankrijk