Decision by the Social Chamber of the Court of Cassation dated June 21, 2018
(Cass. Civ 2e. 21 juin 2018, n°17-15.984)
As per a June 21, 2018 decision, the Court of Cassation answered the following question: Is a skiing accident during a company seminar considered a work-related accident?
Company seminars bringing together employees often give rise to various activities, in particular sports.
In this instance, an employee was attending a seminar in the mountains. A day of free time for relaxation was planned, during which the employees could do whatever activities they wanted to. This particular employee chose to go skiing and consequently bought a ski pass for the ski lifts since the employer did not cover the costs for any of the activities. As the employee was skiing down a slope, she was the victim of an accident. She considered that it was a work-related accident since it had occurred during the seminar, however the health care insurance fund (Caisse Primaire d’Assurance Maladie – CPAM) disputed that claim.
Yet, The Court of Cassation confirmed the Court of Appeal decision, ruling that employees participating in that day remained subject to the employer’s authority as the latter was announced in the seminar schedule, paid as working time and could therefore not be considered as a day off. As such, the skiing accident, which occurred within the free time designated for relaxation, must be considered as a work-related accident.
This legal precedent settles various Courts of Appeal hesitations regarding similar cases of accidents during company seminars. Indeed, certain Courts of Appeal have indeed judged that an accident in such circumstances fell within the employee’s private life.
Thus, with this ruling, the Court of Cassation has indicated that during a company seminar, by nature paid, employees which are paid remain subject to their employer’s authority even though they may have free time for relaxation, unrelated to their professional activity. Any accident that might occur during the seminar is considered a work-related accident.
Within the framework of the next finance and social security Bill , several reforms are bound to have an impact on taxes in France for non-residents.
Overview of the main measures foreseen:
Exemption of capital gains tax on sale of main residence after departure abroad
As of today, a tax resident in France who sells his main residence is not taxed on the capital gain made on that sale.
However, a non-resident who sells the property that was his main residence before his departure abroad is not exempt from that capital gains tax but can only benefit, under certain conditions, from a one-time tax allowance of €150,000.
The draft Finance Bill for 2019 (PLF 2019) foresees an alignment between the tax systems applicable to residents and non-residents regarding capital gains made on their main residence.
Consequently, a non-resident who sells the property that was his main residence in France at the time of his departure abroad would not be taxed on the capital gains made, subject to the dual condition that:
– The sale was concluded at the latest on December 31st of the year following the year of the tax residence transfer (to another country); and
– The property was not placed at the disposal of a third party, whether for a fee or free of charge, between the transfer of residence and the sale.
Possible exemption of social levies on capital income
Currently, in France, non-residents are subject to social levies (including, in particular, CSG, CRDS and solidarity levy), at the rate of 17.2% on their French-earned income from property and capital gains on real estate.
The draft finance bill on social security for 2019 provides that the people affiliated with a mandatory social security system in another member state of the European Economic Area (EEA) or Switzerland will not be subject to CSG and CRDS in France on capital income but the solidarity levy, whose rate would be increased to 7.5 %, would remain due.
Nevertheless, that exemption would not concern people having established residence outside of the EEA or Switzerland, and who would therefore remain subject to social charges in France on capital income.
Various changes in tax modalities of France-sourced income
The PLF 2019 provides for various measures aimed at bringing the tax system on non-resident income closer in line with the system applied to tax residents in France.
First of all, French-earned salaries, pensions and life annuity rents paid to non-residents are currently subject to a specific deduction at source, partially discharging tax on income, as specified in Article 182A of the French Tax Code (CGI).
As from January 1, 2020, that deduction at source would be eliminated and replaced by a flat, non-discharging deduction at source calculated by applying the tax rate by default used for the withholding tax on resident income.
In addition, starting with taxes on income earned in 2018, the minimum tax rate applicable to France-sourced income of non-residents will rise:
– From 20% to 30% in Metropolitan France; and
– From 14.4% to 25% for income whose source is in the French Overseas Departments (DOM).
Of course, taxpayers can still request the application of the average tax rate to their France-sourced income, resulting from the application of the progressive tax brackets to the whole of their foreign- and France-sourced income, if it is lower than the minimum rate mentioned above.
Lastly, the PLF 2019 provides that, starting with taxes on 2018 income, non-residents can deduct the alimony paid out, on condition that it is taxed in France and that it has not already entitled the taxpayer to a tax break in his Country of residence.
To be continued when voted on in late December…
Above and beyond potential protection by Copyrights, all graphics or designs can be protected by Design rights.
Any reproduction, without consent, of graphics or designs protected by design rights constitutes, as a matter of principle, an act of counterfeiting. Consequently, caution is required.
In two rulings on September 27, 2017 opposing the companies Nintendo and BigBen Interactive GmbH / BigBen Interactive SA, the European Court of Justice (CJEU) nevertheless laid down a strictly-regulated exception to the protection of designs.
The company Nintendo filed a counterfeit claim against the video game accessory manufacturer, BigBen Interactive, who was reproducing, for the purpose of selling its products, images of Nintendo console accessories protected by design rights.
The Court of Justice took a chunk out of rights holders’ monopoly by judging that a design could lawfully be reproduced without prior consent from the holder if that reproduction was an illustration.
The images were considered illustrative insofar as they allowed to demonstrate the joint use of the BigBen Interactive and Nintendo products to consumers.
Nonetheless, this lawful reproduction is subject to conditions.
The Court of Justice requires that the reproduction of the design be made within the framework of loyal competition and that it not threaten the economic balance of its holder. Moreover, it must be possible to identify the holder of the design reproduced.
Lastly, caution is required since, although the Court of Justice’s interpretation seems to reduce the scope of protection for Community Designs, the exception is nonetheless subject to conditions and may be limited by potential cumulative protection by Copyright.
European Court of Justice, September 27, 2017, C24/16 and C-25/16, EU:C:2017:724, Nintendo / BigBen Interactive GmbH and BigBen Interactive SA.