United States – Updated Guidance on Claiming Credit for French Taxes
United States – Updated Guidance on Claiming Credit for
This report covers a new guidance from the U.S. tax authorities on their position on the creditability of the French “contribution sociale généralisée” (CSG) tax and the “contribution pour le remboursement de la dette sociale” (CRDS) tax.
To subscribe to GMS Flash Alert, fill out the subscription form.
On July 19, 2019, the U.S. Internal Revenue Service (IRS) issued updated guidance on filing claims for refund of U.S. taxes resulting from the IRS’ reversal of its position on the creditability of the French “contribution sociale généralisée” (CSG) tax and the “contribution pour le remboursement de la dette sociale” (CRDS) tax.1 The updated guidance clarifies that while individual taxpayers can file amended returns to claim refunds based on credits for CSG and CRDS paid in prior years, U.S. employers may not file for refunds claiming credit for CSG or CRDS withheld or otherwise paid on behalf of their employees.
WHY THIS MATTERS
The updated guidance issued by the IRS clarifies that companies whose employees were subject to CSG and CRDS cannot file claims for refunds even though they may have withheld or paid these taxes in prior years. However, the guidance sets out the mechanism whereby individual taxpayers can file claims for refunds going back up to 10 years.
In June 2019, the IRS reversed its position on the deductibility or creditability of CSG and CRDS, thus bringing to an end pending U.S. Tax Court litigation on this issue.2 As a result of this reversal, U.S. individual taxpayers subject to CSG and CRDS (but not their employers) can claim a deduction or credit for these taxes, and may be able to claim refunds through amended returns for prior years in which they were subject to these taxes.
The above information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.
The information contained in this newsletter was submitted by the KPMG International member firm in United States.
© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.