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Thursday, December 7, 2023
Courthouse News Service
Thursday, December 7, 2023 | Back issues
Courthouse News Service Courthouse News Service

EU Court Bars France From Tax Double-Dips

(CN) - The European Court of Justice revisited the issue of social security deductions for people living abroad, ruling on Thursday that France can't tax the assets of citizens and legal residents living and working outside its borders.

In 2000, the EU high court ruled that France could not "double-dip" by taking social security deductions from its citizens working in another member state since they had already paid taxes on the income earned there.

This time, the French Council of State asked the EU court to weigh in on whether tax authorities in France can levy a social security tax on the assets of its people living abroad - namely the life insurance annuities purchased in the Netherlands by Dutch citizen Gerald de Ruyter, who is also a legal resident of France.

In a judgment issued Thursday, the Luxembourg-based court held that double-dipping is double-dipping, regardless of whether it's done on a paycheck or asset-derived income.

"To require those who, among the residents of a member state, are insured under the social security scheme of another member state to finance, in addition, even if only partially, the social security scheme of the member state of residence would give rise to unequal treatment under EU law, since all other residents of the latter member state are required to contribute only to its social security scheme," the court wrote.

"Given that Mr de Ruyter, as a migrant worker, is subject to the social security scheme of the member state of employment, namely the Netherlands, and that he falls within neither of the exceptions provided for in EU law authorizing the overlapping of the national legislation of several member states regarding social security, he cannot be made subject by France, in respect of both income from an employment relationship and that from his assets, to legal provisions imposing levies which have a direct and sufficiently relevant link with the legislation governing the branches of social security under EU law," the court concluded.

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