Jeantet Tax Alert – Insurance and mutual health companies, march 2021

 

FRENCH CONTRIBUTIONS BASED ON PREMIUMS

WHO IS CONCERNED?

Foreign insurance and mutual health insurance companies (European or non-European) having insured individuals residing in France.

If you have within your client individuals residing in France, you may have to respect some tax obligations, and particularly for social and tax matters.

Such foreign companies are subject to 2 taxes in France:

The taxe de solidarité additionnelle (i.e. « TSA ») and the taxe spéciale sur les conventions d’assurance (i.e. « TSCA »).

  • TSA is based on premiums which concerns health guarantees paid by French insured individuals (Social obligation). L.862-4 and foll. of Social security French code
  • TSCA is based on premiums which concerns non-health guarantees (particularly death guarantees) paid by French insured individuals (Tax obligation). 991 and foll. of French tax code

In case of multiple guarantees, a very specific analysis must be done.

WHAT ARE TSA AND TSCA RATES

TSA TSCA
Health insurance:

–       20,27% of the premiums (persons affiliated to French social security scheme) or

–       14% of the premiums (persons not affiliated to French social security scheme)

 

Daily cash sickness benefits:

–       14% of the premiums (either for persons affiliated or not to the French social security scheme)

Non-health guarantees:

–       9% of the premiums (either for persons affiliated or not to the French social security scheme) paid by individuals residing in France.

*Since 2019, a special 0,8% exceptional contribution is due for 2020.

WHICH RETURN MUST BE FILED?

For TSA, companies must file a quarterly TSA social return CTP 135, 136 (URSSAF).

For TSCA, companies must file a monthly n°2787 tax return (SIE des non-résidents).

APPOINTMENT OF A TAX REPRESENTATIVE

Depending on your situation, a tax representative appointment can be required by French social and tax authorities:

  • If you are a non-European company operating in France, you are required to appoint a tax representative approved by the French Social and Tax Administration and who is personally liable for taxes and penalties.
  • If you are a European company operating in France, you are not required to appoint a tax representative, but it is recommended to appoint one, who will ensure that your company is following tax and social rules.

WHAT ARE THE LITIGATION RISKS?

Social and tax risks:

  • Late filing: 3.750€/months
  • Error in the return: 750€
  • Default of filing: assessment procedure by the French authorities (which can reach a penalty of 40% and in some cases 80%)
  • Default of payment: 5% + late interest penalties

Criminal risks:  Tax fraud and criminal offense

Activity risks: French regulatory authorities can act against foreign companies which are not complying with their French obligations.

Possibility to obtain a dismissal of the penalties in case of self-regularization.

HOW JEANTET CAN ASSIST YOU

  • Jeantet can assess your tax exposure (Screening of insurance polices, TSA/TSCA liability’s analysis).
  • Jeantet can be appointed as the Tax representative for TSA, TSCA and other taxes (Lawyer qualified as “Certified operator” by tax and social authorities).
  • Jeantet can assist foreign insurance companies to fulfil their tax obligations (filing process monitored by Jeantet: agenda, timeline, quarterly filing, and payments…).
  • Jeantet can assist you in in your social and tax claim and/or in case of social or/and tax litigation.

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