It was mentioned in passing by some newspapers, but for some reasons it didn’t make the headlines. So here it is: you may remember that, in 2012, France decided that even non-residents who were renting out their flat or holiday house in France had to pay French social contributions on their rental revenues (we call it CSG/CRDS). This added 15,5% of taxes for hundreds of thousands of owners who happened not to live in France (and believe me, this can happen to the best of us!). Just like that. And as it was decided end of 2012, of course it was applied retroactively to all rental revenues in 2012. Of course it was.
We happen to own a studio flat in Paris. We decided to rent it out when we moved to London, and as a result, in 2012, our French tax liability almost doubled overnight (from 20% to 35.5%). Obviously I think that it is unfair to levy such a tax because, as a non-resident, I am already paying for National Insurance, Pension and the rest of it in the UK. Not to mention that, in France, we are paying for all the infrastructure through the local taxes. The new tax came on top of everything else. This is, to me, the perfect example of what a populist decision is: as most owners don’t vote in France, they are an easy target. Let’s make them pay more, nobody will complain! Populism at its best. Utterly disgusting.
The thing is, rules can’t keep changing. You take a mortgage, you rent out your flat and suddenly you tax bill is doubled. How is this fair? How can you justify it? If you had known, maybe you wouldn’t have bought the flat in the first place, or you would have increased the rent. In fact, you might even be out of pocket because you have to pay taxes on the capital you reimburse to the bank every month. But no, changing the rules retroactively seems to be the latest craze in France. Beware. They need money. Who cares about doing it in a fair way?
I must admit that I started to regain hope when the European court ruled, on 26th of February 2015, that non-residents shouldn’t have to pay for CSG and CRDS (i.e. social contributions) on rental revenues and capital gain. Naively, I thought that France would pay us back. How very silly of me! I clearly will never learn.
Over the weekend, I logged on to my ‘personal account’ (espace personnel) to reclaim all the social contributions that I had paid (it is called a ‘reclamation’). I filled out the forms, joined the relevant documents and pressed the ‘sent’ button. I thought that I was done. They were going to reimburse me. But wait for it: this morning I received an email telling me that my case had been updated. I logged on, only to see that they had closed it without a single word of explanation. Yep, you read that right. Obviously, no reimbursement was even mentioned. Just look at the screenshot if you don’t believe me.
Undeterred, I tried to call them. When you are a non-resident, they never pick up the phone. You might -only might- get a response to an email, but that’s about it. But this morning, they had put a pre-recorded voicemail, saying that they didn’t know what to do about the decision just yet, because it needed to go through the ‘Conseil d’Etat’. As European decisions are supposed to prevail on national laws, I don’t understand why this step is even necessary. Come on: the tax was illegally levied and needs to be reimbursed. It is very simple, and they should apologise for this. But no, this is just yet another delaying tactic. No dates as to when the ‘Conseil d’Etat’ will deign to consider the case is set, of course. It would be too simple. I am starting to wonder whether France will ever pay back what it owes to non-residents? This is is a new Russian loan in the making.
Suffice to say: I am gutted: I can’t believe that my claims were closed unilaterally. Surely they could have said that they were waiting for instructions and would come back to me when ready. But no, welcome to France! This is not the type of behaviour that you expect from a democracy. Come to think of it, this wouldn’t be out of place in a banana republic. Come on, let’s rip them off!
Don’t get me wrong: I am in a good place and I fully realise that it is a first-world problem. But isn’t it a matter of principles? If you pay your taxes late, penalties apply. But if you are owed some money, well, tough luck. A classic case of double standards.
In France, just like everywhere else, the taxman is always right. Am I allowed to say what I think right now? The British system is a lot more fairer. And at least they write polite letters.