Brussels, 08/04/2008 (Agence Europe) - On Thursday 3 April, the Court of Justice decided that the French taxation regime may, without being in breach of Community law, consider a number of social contributions as income tax. The national courts may therefore decide one way or another, as long as access to related social services is not brought into question (Case C-103/06).
Philippe Derouin, a lawyer in Paris and in the United Kingdom but resident in France, contributes to the French health insurance scheme, URSSAF (Union de recouvrement des cotisations sociales et d'allocations familiales). His contributions are calculated on all of his British and French income. He considers, however, that the generalised social contribution (GSC) and the social debt repayment contribution (SDRC) should not be calculated on revenue earned in France. If these contributions are to be considered as taxation, they cannot apply to British revenue, as British tax is already imposed in the United Kingdom - such is the principle of the Franco-British convention of 22 May 1968 to avoid double taxation. The French tax regime, however, considers that the contributions in question are social contributions and would therefore not be affected by the convention in Mr Derouin's case. The Court does not rule on this issue but considers that national jurisdiction can go one way or the other without infringing EEC Council Regulation 1408/71 on the free movement of workers. One must, however, ensure safeguard of the worker's right to enjoy all benefits provided by the applicable legislation (C-103/06). It should be noted that the United Kingdom and France concluded, on 28 January 2004, a new double-taxation convention expressly stipulating that the GSC and the SDRC should be among the taxes subject to the terms of the convention. (C.D.)