fr-capital-gains

France — Capital Gains, Investment Income & Equity Compensation v1.0

Based on work by Romain Simon (@romainsimon), licensed under MIT. Adapted for the OpenAccountants format.

Disclaimer: This skill is for informational purposes only and does not constitute tax advice. All positions must be reviewed and signed off by a qualified expert-comptable or avocat fiscaliste before filing. Get this reviewed at openaccountants.com.

Section 1 — Quick Reference

Quick Reference

Field	Value
Country	France
Taxes covered	PFU (flat tax), prélèvements sociaux (PS), barème option on capital income
Currency	EUR only
Tax year	Calendar year
Key forms	2042, 2042-C, 2074, 2042-IFI
Primary legislation	art. 200 A CGI (PFU), art. 158-3° CGI (40% abattement), art. 150-0 A CGI (PV mobilières)

Section 2 — PFU vs Barème: The Fundamental Arbitrage

Default: PFU (Prélèvement Forfaitaire Unique / Flat Tax)

Default PFU rates by income type

Income type	IR component	PS component (revenus 2025)	Total PFU
Dividends	12.8%	17.2%	30.0%
Interest (RCM)	12.8%	17.2%	30.0%
Capital gains on securities (PV mobilières)	12.8%	18.6%	31.4%
PEA gains (exit after 5 yr)	0% (exempt)	17.2% → 18.6% from 01/01/2026	17.2% or 18.6%

Differentiated PS rates (LFSS 2026)

Differentiated PS rates

Category	Legal basis	PS on 2025 income	PS on 2026+ income	Effective PFU 2025
Revenus du patrimoine (capital gains, crypto, LMNP)	L. 136-6 CSS	18.6%	18.6%	31.4%
Produits de placement (dividends, interest, PEA exit, PER capital)	L. 136-7 CSS	17.2%	18.6% from 01/01/2026	30.0%
Unchanged (AV, bare rental, SCPI, old PEL/CEL)	—	17.2%	17.2%	—

• LFSS 2026 CSG increase — LFSS 2026 (loi n° 2025-1403, art. 12) raised CSG from 9.2% to 10.6% (PS total: 17.2% → 18.6%), with two different effective dates (loi n° 2025-1403, art. 12)

Option barème (progressive rates)

On election (global and irrevocable for the year), all capital income is taxed at the progressive IR schedule instead of 12.8%.

Benefits of barème:

• 40% abattement on dividends (art. 158-3° CGI)
• CSG déductible 6.8% in N+1 (economy = 6.8% × base × TMI in N+1)

Quick guidance TMI

TMI	Recommendation	Reason
0% or 11%	Barème	Low bracket + 40% dividend abattement + deductible CSG
30%	Compute both	Depends on composition (dividends vs interest vs gains)
41% or 45%	PFU	Flat 12.8% < 41%/45% bracket

• Critical rule on barème option — the barème option is global (all capital income for the year) and irrevocable. Never recommend without checking the full composition.

Worked comparison — Single, TMI 30%, EUR 10,000 dividends (2025)

Under PFU (dividends = produits de placement, PS 17.2%):

PFU calculation

Component	Amount
IR: 10,000 × 12.8%	1,280
PS: 10,000 × 17.2%	1,720
Total	3,000

Under barème:

Barème calculation

Component	Amount
Taxable base: 10,000 × (1 − 40%)	6,000
IR: 6,000 × 30%	1,800
PS: 10,000 × 17.2%	1,720
CSG déductible N+1: 10,000 × 6.8% × 30%	−204
Net total	3,316

→ PFU more favourable (EUR 3,000 < EUR 3,316) despite the 40% abattement.

Section 3 — Types of Capital Income

Dividends (case 2DC)

• Dividends PFU/barème rules — Default PFU 30% (2025); rising to 31.4% from dividends received in 2026. Option barème: 40% abattement + progressive IR + PS. Foreign dividends: may carry withholding tax from source country — credit under tax treaty

Interest / RCM (case 2TR)

• Interest / RCM rules — Bonds, crowdfunding interest, taxable savings accounts, term deposits. PFU or barème on option. No abattement (unlike dividends). Crowdfunding immobilier: taxed as RCM, not rental income. Livrets réglementés (Livret A, LDDS, LEP): fully exempt from IR and PS

Capital gains on securities (case 3VG)

• Capital gains on securities rules — Net gain on sale of shares, partnership interests, UCITS. PFU or barème on option. Holding period abattements: only for shares acquired before 2018 AND barème option. Director retirement abattement: EUR 500,000 lump sum under strict conditions

Section 4 — PEA (Plan d'Épargne en Actions)

Contribution ceilings

PEA contribution ceilings

Plan	Ceiling
PEA classique	EUR 150,000
PEA-PME	Combined PEA + PEA-PME ≤ EUR 225,000
PEA jeune (adult child attached to household)	EUR 20,000

• Ceiling application — Ceilings apply to contributions, not plan value. A plan can exceed EUR 150,000 through gains.

Tax treatment by plan age

Tax treatment by plan age (PEA)

Plan age	Withdrawal effect	IR	PS
< 5 years	Closure of plan	PFU 12.8% (or barème)	17.2%
≥ 5 years	Free withdrawals, no closure	Exempt	17.2% (→ 18.6% from 01/01/2026)

• PEA exemption after 5 years — After 5 years: total IR exemption on gains. Only PS are due at each withdrawal. PS from 01/01/2026: 18.6% on total gain at withdrawal (including gain accrued before 2026). PEA gains are "produits de placement" (L. 136-7 CSS). (L. 136-7 CSS)
• Eligible/non-eligible PEA assets — Eligible assets: European equities (EU + EEA), UCITS with ≥75% European equities, eligible European ETFs. Non-eligible: US/Asian stocks, bonds, gold, crypto.

Section 5 — Assurance-Vie (Life Insurance) — Taxation of Withdrawals (Rachats)

Proportionality principle

• Taxable gain portion on partial withdrawal — taxable_gain_portion = (total_gains / total_contract_value) × withdrawal_amount
• Proportionality rule — A partial withdrawal does not extract only non-taxable capital. It extracts a proportional fraction of gains and capital.

Annual abattement after 8 years

Annual abattement after 8 years

Situation	Annual abattement
Single, widowed, divorced	EUR 4,600
Couple (joint filing)	EUR 9,200

• 8-year abattement condition — Condition: 8 years of contract age (not contribution age). Renewable each calendar year.

Tax rates by contribution date

Contributions after 27 September 2017:

Tax rates by contribution date (post-2017)

Situation	Rate
Contract < 8 years	PFU 30% (12.8% IR + 17.2% PS)
Contract ≥ 8 years, total contributions < EUR 150,000	24.7% (7.5% IR + 17.2% PS) after abattement
Contract ≥ 8 years, total contributions ≥ EUR 150,000	30% on fraction above EUR 150,000 of net contributions

• 150k threshold household basis — The EUR 150,000 threshold is assessed across all AV contracts of the household.
• Contributions before 27 September 2017 — Degressive PFL rates (35% / 15% / 7.5%) by contract age.
• PS rate on AV unchanged — PS rate on AV: 17.2% unchanged (excluded from LFSS 2026 increase).

Strategy: optimised withdrawals after 8 years

Spread withdrawals to stay within the annual abattement (EUR 9,200 couple). Example: need EUR 50,000 over 5 years → EUR 10,000/year optimises the abattement if gain portion ≤ abattement per withdrawal.

Section 6 — RSU / AGA (Restricted Stock Units / Actions Gratuites)

Two distinct taxable events

1. Gain d'acquisition (at vesting)

Attribute	Detail
Nature	Salary income (traitements et salaires)
2042 box	1TT / 1UT
Tax	Progressive IR schedule (after 10% salary abattement on total salaries)
Social contributions	CSG/CRDS 9.7% + salarial contribution 10% (qualifying plans, within caps)

Two distinct taxable events

2. Plus-value de cession (at sale) (L. 136-6 CSS)

Attribute	Detail
Nature	PV mobilière
Tax	PFU 31.4% for disposals from 2025 (12.8% IR + 18.6% PS) or barème on option
Qualification	"Revenus du patrimoine" (L. 136-6 CSS) → PS 18.6% from 2025

• Classic trap and strategy for RSU — Classic trap: treating the acquisition gain as a standard capital gain. It is first and foremost salary (barème), subject to CSG 9.7% and salarial contribution 10%. Only the subsequent appreciation (vesting value → sale price) is a capital gain. Strategy: for massive vesting (> 1.5× annual salary), consider the quotient pour revenus exceptionnels (coefficient 4) to smooth across brackets. Useless if already at TMI 45%.

Section 7 — BSPCE (Bons de Souscription de Parts de Créateur d'Entreprise)

Key difference vs RSU: no acquisition gain taxed as salary. The gain is only realised and taxed at sale of the underlying shares.

Tax rate on disposal gain

Tax rate on disposal gain by tenure

Tenure in the company at sale date	Total rate (2025 disposals)
≥ 3 years	31.4% (12.8% IR + 18.6% PS — PV mobilière)
< 3 years	50% (30% IR + 20% PS — specific salarial contribution)

• Early departure penalty — Early departure penalty (< 3 years) is severe. Factor into departure decisions.

Issuing company eligibility

• BSPCE issuing company eligibility criteria — SA or SAS incorporated in France; Registered < 15 years; Unlisted or listed on SME compartment; Subject to IS; Capital ≥ 25% held by natural persons; No restructuring history (merger, demerger, takeover). If conditions not met: requalification as salary → progressive IR + full social contributions.

Section 8 — Stock-Options

Stock-option regime by plan period

Plan period	Regime
Before 2012	Favourable specific schedule (by holding period)
2012–2016	Salary (IR barème + specific social contributions)
After 2017	Salary (barème) + salarial contribution 10% on qualifying plans

• Excess discount rule — Excess discount (rabais excédentaire): difference between market price at grant and exercise price, above 5% → taxed as salary at exercise. Always consult the plan to determine the applicable regime.

Section 9 — PEE / PERCO / Employee Savings

PEE (Plan d'Épargne Entreprise)

PEE features

Feature	Detail
Employer match (abondement)	IR-exempt + PS-exempt within caps
Match cap	~EUR 3,709 per beneficiary (8% PASS — verify annually)
Lock-up	5 years (early exit for marriage, 3rd child birth, home purchase, job loss, etc.)
Exit after 5 years	IR-exempt, only PS 17.2% on gains

PERCO / PERO (Company PER)

PERCO/PERO features

Feature	Detail
Exit	At retirement — annuity or lump sum
Tax at exit	Same as individual PER (contributions at barème, gains at PFU)
Match cap	~EUR 7,418 (distinct from PEE cap)

Priority rule

Priority order for employee savings envelopes

Priority	Envelope	Why
1st	PEE + employer match	Match = 50–300% instant return — unbeatable
2nd	PERCO/PERO + employer match	Same logic, retirement lock
3rd	Individual PER	Only TMI deduction, no match

• Golden rule on employer match priority — never contribute to an individual PER before saturating the employer match on PEE + PERCO. The match is free money.

Section 10 — PER Sortie en Capital (Exit Taxation)

PER lump sum exit taxation

Component	Tax treatment
Contributions (previously deducted)	Progressive IR schedule (barème) — treated as income
Investment gains	PFU: 12.8% IR + PS (17.2% before 01/01/2026; 18.6% from 01/01/2026)

• PER gains classification and trap — PER gains are "produits de placement" (L. 136-7 CSS). Trap: a lump-sum exit on contributions at TMI 45% is nearly neutral — same tax as a normal income year. Fractionate the exit over multiple years if possible. (L. 136-7 CSS)

Section 11 — Conservative Defaults

Conservative default assumptions

Ambiguity	Default
PFU vs barème unclear	Apply PFU (simpler, no global commitment)
RSU gain classification unclear	Treat as salary (acquisition gain)
BSPCE tenure unclear	Assume < 3 years (50% rate — conservative)
PEA age unclear	Assume < 5 years (taxable)
AV abattement eligibility unclear	No abattement applied
PS rate unclear for 2025 income	Apply 18.6% for PV mobilières, 17.2% for dividends/interest

Section 12 — Key Legal References

Key legal references table

Rule	Article
PFU	art. 200 A CGI
Option barème	art. 200 A-2 CGI
Dividend 40% abattement	art. 158-3° CGI
Capital gains on securities	art. 150-0 A to 150-0 D CGI
Prélèvements sociaux	art. L. 136-1 et seq. CSS
PS differentiation (patrimoine vs placement)	art. L. 136-6 and L. 136-7 CSS
LFSS 2026 CSG increase	loi n° 2025-1403, art. 12
RSU / AGA	art. 80 quaterdecies CGI
BSPCE	art. 163 bis G CGI
Stock-options	art. 80 bis CGI
PEA	art. 163 quinquies D CGI, art. L. 221-30 CMF
Assurance-vie rachats	art. 125-0 A CGI
AV abattement	art. 125-0 A-I-2° CGI
AV 150k threshold	art. 125-0 A-I-2° bis CGI
PEE	art. L. 3332-1 et seq. Code du travail

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