France Implementing Final Steps of New Social Tax Reporting System

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By Rick Mitchell

May 24—The French government has published a decree setting out final steps of a plan aimed at standardizing and modernizing the country’s payroll management through a unified social welfare data reporting system for employers.

The so-called déclaration sociale nominative, or DSN, allows companies to electronically transmit payroll data via their payroll software programs, third-party payroll providers or certified accountants and it consolidates some 20 existing payroll reporting obligations into one system, according to a May 19 government statement.

France’s 13,000 largest companies have been legally required to use the DSN since May 2015, but at least another 460,000 smaller companies, totaling over 13 million employees, have implemented the system in advance of a legal requirement. The decree published May 19 sets out a schedule for extending the legal requirement to most companies and certain payroll service providers starting July 1, and then to all companies starting Jan. 1, 2017.

Special System for Smaller Employers

While larger companies will use their own updated payroll software, a payroll service provider or certified accountant to file the DSN, companies with fewer than 20 employees will be able to use the Titre Emploi Service Entreprise (TESE) employment service, operated by the French social security agency URSSAF (Union pour le recouvrement de la securite sociale et des allocations familiales) to file it, according to the public body in charge of the DSN project (the Groupement d'Intérêt Public Modernisation des Déclarations Sociales, or GIP-MDS).

France has been gradually implementing the system to replace its notoriously onerous reporting requirements for dozens of social welfare, health insurance, pension and other related public and private agencies that collect the tax, also called contributions. The system also helps pave the way for the government’s plan for French employers to implement a withholding-at-source income tax system by 2018 and also may help fight social security fraud by enabling cross-checking of collected declarations and collected contributions, the government said.

July 1 Deadline

Starting July 1, 2016, for payrolls with information actually due in August, the DSN reporting requirement applies to companies under the general and agricultural tax regimes that don't use a third-party payroll service provider and that have total yearly payroll charges of 50,000 euros ($55,733) or more. The deadline also applies to third-party payroll service providers, mainly certified accountants, that remit for their clients an amount of social welfare contributions of 10 million euros ($11 million) or more per year, the government said.

On Jan. 1, 2017, the requirement extends to all companies that have employees in the general social security system, whether or not they use a third-party payroll provider. That deadline also applies to companies under the agricultural tax regime that don’t use a third-party payroll service and have total social welfare contributions of at least 3,000 euros ($3,344).

Recommendations

According to the GIP-MDS, to ensure successful implementation of the DSN, employers should:

• Contact payroll system software publishers to verify when DSN transmission-capable software will be available or contact certified accountants for advice on what steps to take.

• Verify the quality of the data that to be transmitted through the DSN, including business identification numbers (SIRET), number of employees, data on work contracts and contributions.

• Send a test DSN before actually sending the real one by using the tools “DNS-Val” and Net-DSN.

• Once the real DSN is sent, check the system dashboard for possible messages and possible corrections to make.

The GIP-MDS recommended that companies start implementing the DSN before the summer deadlines to allow for time to gradually implement and test their systems, including working with their payroll providers or accountants if necessary.

To contact the reporter on this story: Rick Mitchell in Paris at correspondents@bna.com

To contact the editor responsible for this story: Jared Mondschein at jmondschein@bna.com

For More Information

Michel Sapin's speech

Text of decree No. 2016-611 of May 18, 2016, published May 19, setting deadlines for obligatory transmission of the déclaration sociale nominative is available in French at https://www.legifrance.gouv.fr/eli/decret/2016/5/18/FCPS1608295D/jo/texte.

More information on DSN is available in French at dsn-info.fr.

More information on payroll issues in France can be found in the France country primer.