It is very important not to confuse Social Charges with Social Security Contributions. No matter who tries to persuade you otherwise, Social Charges are a tax, pure and simple. In September/October each year the 'fisc' sends out a demand for the payment of the contributions sociales, made up of three different social charges:
Although these charges are not part of the French income tax system, they are payable on most sources of revenue, including income from abroad. If you are employed or self-employed in France, you will pay the charges on your employment or business income during the course of the year, along with your other social security contributions.
The social charge rate is currently 7.4% on early retirement pensions, and 15.5% on rental, investment and savings income. They are, in part, deductible against French income tax. If you are an EU national of state retirement age, you are not liable for this charge on your pensions if you have health cover through an S1.
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(1) Part of the CSG is deductible from the following year's taxable income.
(2) Foreign pensions and salaries are not normally liable to the CSG and CRDS if the pensioner is eligible to continued health cover under an S1 obtained from the DSS. It is important to note that foreign investment income and gains are never exempt from these charges. If foreign pensions have been declared as annuities for French income tax purposes the CSG, CRDS and PS will apply.
(3) This applies to foreign earnings received by individuals resident in France and covered under a French health scheme. This charge is treated as part of mainstream French social security charges, which in itself helps to blur the distinction between tax and social charge. In keeping with the somewhat furtive nature of this tax, it can get extremely complex. We can only hope that the voice of reason will prevail and that the French tax system will be made clearer and more logical, but for now be prepared to be confused and exasperated by this very 'French' means of separating you from your cash.
Social Charges are probably the most important tax to be taken into consideration when moving to France. Without these charges, the tax burden would be much lighter in France than in the UK. These taxes sneak up on you with all the subtlety of a sledgehammer.