- According to the Cour de Cassation, it is both a tax and a social contribution - According to the Conseil Constitutionnel, it is a tax - According to the Conseil d'Etat and the EUCJ, it is a social contribution

Slightly off topic but for foreigners who are interested, the welfare state (called Social Security, the word thus a much broader sense than in the US context) in France has been created as a separate entity from the Government.

It is managed by workers' representatives and employers' representatives. Since, in the end, it is the Governement (the Parliament, to be exact) that make laws, including those related to the Social Security, it has as much power over this sytem as it wants.

Nonetheless, this leads France to have technically two different budgets - the Government one and the Social Security one - with their own bills and two systems of taxation - social contributions, which go to the Social Security budget; and taxes, which go to the Government budget.

OVertime, social contributions - which are computed on labor income - have been cut, especially for low wage earners. The shortfall in financing has been partly compensated by transferring tax revenues to the Social Security.

This leads to weird public accounting and public debate: for instance, there is much talk about the Social Security deficit or even specific branches of the Social Security (since they are all financed by their social contribution), missing the fact that it reflects completely arbitrary ways to earmarked specific taxes to different part of the Government.

Another example of weirdness in the public debate because of this is the enormous importance of the "income tax" in the public debate, and especially that few households pay it and most of the money comes from a minority of household ... but the "income tax" actually brings _less_ money than the CSG, which is a tax on income that is different thatn "the income tax" (impôt sur le revenu). Because of the names and the arbitrary accounting practices, the vast majority of income taxation is completely out of the public debate radar.