Tax alert: a new 8% health contribution almost gone unnoticed!

27 February 2018

Since 2016, anyone working or residing in France on a steady and regular basis benefits from a health cover called “Puma” and the reimbursement of health care costs. In order to finance this coverage, a new health contribution called “cotisation subsidiaire maladie”, provided by Article L.380-2 of the French Social Security Code, was introduced in 2016.

This cotisation subsidiaire maladie remained unnoticed by most professionals until it was first recovered by the URSSAF in November 2017.

It is due by each member of the tax household personally. If the tax household counts two persons liable to the contribution, two contributions will have to be paid.

Is liable to the cotisation subsidiaire maladie, any individual (i) regularly and steadily living in France and (ii) affiliated to the French Social Security, who meets the following cumulative conditions:

  • his/her income generated by a business activity carried out in France and the one of his/her PACS partner or spouse is less than 10% of the annual French Social Security threshold (“PASS”) (that is EUR 3,922.80 for 2017), and
  • he/she and his/her spouse do not receive any replacement income, that is any retirement pension, annuity or unemployment benefit.

Therefore, French tax residents living on income generated by their estate or a business activity carried out outside France may be liable to this contribution which is levied at the rate of 8% on their passive income like rental income, dividends, interest, capital gains.

The cotisation subsidiaire maladie is recovered by the URSSAF on the last day of November of the year following the year the contribution is due.