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August 26, 2016
2016-1462

US Tax Court case that disallowed foreign tax credit for French CSG and CRDS social taxes is reversed and sent back to Tax Court for reconsideration

In April 2014, the US Tax Court ruled that two US citizens who resided in France could not claim a credit against their US income tax liability for certain French taxes. The court determined that the taxes in question, la contribution sociale généralisée (CSG) and la contribution pour le remboursement de la dette sociale (CRDS), are social taxes covered by the international social security agreement between the United States and France. As a result of being covered by this agreement, the taxes may not be claimed as a foreign tax credit under US tax law. The taxpayers appealed the outcome of the case. Earlier this month, the US Court of Appeals for the District of Columbia Circuit reversed the holding of the US Tax Court and remanded the case to the Tax Court for reconsideration.

A Tax Alert prepared by EY's People Advisory Services group, and attached below, provides additional details.

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Full text of Tax Alert 2016-1462

 

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