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France: No welfare contributions, income of French residents in Switzerland

France: Welfare contributions, residents in Switzerland

The Court of Justice for the European Union (CJEU) today issued a judgment concluding that welfare contributions aimed at funding social security benefits in France cannot be charged on income from the assets of French residents insured under the Swiss social security scheme.

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The case is: Ministre de l'Action et des Comptes publics v. Dreyer, C-372/18 (14 March 2019)

As briefly explained in a CJEU release [PDF 162 KB], the individual taxpayers (French tax residents) were insured under the Swiss social security scheme because the husband taxpayer spent his career working in Switzerland. In 2016, the French tax authorities declared the taxpayers were subject, in respect of income from assets received in France in 2015, to contributions and levies—in particular, the Caisse nationale de solidarité pour l’autonomie (CNA or National Solidarity Fund for Independent Living).

The taxpayers claimed, on the basis that the benefits funded by the contributions and levies were social security contributions, that they were already insured under the Swiss social security scheme and could not be required to contribute to the funding of the French social security scheme. The EU regulation on the coordination of social security systems provides that persons to whom that regulation applies are to be subject to the legislation of a single EU Member State only and, for those purposes, Switzerland is regarded as a EU Member State.

The taxpayers initiated an action against the French tax authorities, and the Cour administrative d’appel de Nancy (Administrative Court of Appeal, Nancy, France) expressed doubts as to the nature of the benefits funded by the contributions and levies apportioned to the CNA. The court therefore referred the case to the CJEU for a determination whether the benefits (allocation personnalisée d’autonomie (personal independence allowance) and prestation compensatoire du handicap (disability compensation allowance)) may be regarded as social security benefits.

The CJEU today found the subject welfare contributions aimed at funding social security benefits in France cannot be charged on income from the assets of French residents insured under the Swiss social security scheme.

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