US and French Authorities reach agreement on creditability of French CSG and CRDS taxes

What is the Update?

US and French Authorities reach agreement on creditability of French CSG and CRDS taxes.


The United States generally allows a taxpayer to claim a foreign tax credit for foreign income and social taxes paid or accrued during the tax year. However, the foreign tax credit is denied for social taxes covered under a totalization agreement between the US and the foreign country. There has been an outstanding question regarding two specific taxes that are assessed in France and connected with their social security program.


Until now, the IRS has taken the position that French Contribution Sociale Généralisée (CSG) and Contribution au Remboursement de la Dette Sociale (CRDS) taxes are covered by the totalization agreement between the United States and France and therefore no foreign tax credit is allowed for these taxes. This is currently being litigated in the case of Eshel vs. Commissioner. The U.S. Tax Court (142 TC 197 (2014)) concluded that these taxes were considered social security and therefore not creditable, but the U.S. Court of Appeals for the District of Columbia Circuit (831 F. 3d 512, (D.C. Cir., 2016)) reversed and remanded the case back to the U.S. Tax Court for reconsideration.

In a June 13, 2019 submission to the U.S. Tax Court, the IRS reported that the U.S. State Department has agreed with the French government that CSG and CRDS are not covered by the totalization agreement and therefore taxpayers are not precluded from claiming a foreign tax credit for these taxes. It is possible to claim this credit going back 10 years by amended tax returns.

Deloitte Société d’Avocats’ View

US taxpayers who are subject to CSG and CRDS taxes should discuss this development with their tax advisors.

Christina Melady

Christina Melady, Partner, has over 23 years’ experience practicing tax law in France and advises both companies and managers on personal tax matters. Christina created the specialized practice in France […]

Greg LaBorde

I am a managing director practicing in the mobility tax area of our global employer services practices. I am also a member of our national GES quality team involved with […]