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Social charges on pensions in France
Why am I liable to social charges on my pension?
France operates a generous healthcare system, whose cost has more often than not exceeded revenues that the French government collects from its social security system. Due to these recurring deficits, provisions are in place to increase revenue streams, including subjecting pensions to social charges under the income tax system.
Therefore, pensions received by taxable persons in France are subject to social charges if the person (or household) is considered to be dependent on the French health system. This applies to both local French pensions as well as foreign private ones.
However, certain exemptions apply, should these conditions be met:
This rule has been part of French tax and social charges law for the last few years, but has often been overlooked by tax offices due to the volume of work they have. However, more and more tax offices are looking into this matter and will subject social levies and penalties for non-declaration and late payment of the sums due.
This question was answered by Olaf Muscat Baron who is a Fellow of the Chartered Association of Accountants UK, a French expert comptable and an International tax advisor.He is the principal accountant of Fiscaly, an accountancy firm based in the Dordogne.
See www.fiscaly.fr or call 09 81 09 00 15