What is income from movable capital (RCM)?
Income from movable capital: definition
Income from movable capital (RCM) refers to all income derived from the holding of capital invested in transferable securities, i.e. financial investmentsas opposed to income from professional activity or real estate. They correspond to the financial flows received by a taxpayer in return for:
- either the provision of capital (interest);
- either participation in a legal entity (dividends);
- or the holding of similar financial products.
RCMs fall into the category of wealth income and are subject to specific tax rules provided for by the General Tax Code (CGI).
Important distinction: RCM and capital gains
THE capital gains from transfer of securities (shares, bonds, shares) are not legally RCM, but fall under a separate tax category: capital gains on securities and corporate rights. However, RCM and capital gains are often grouped together, because they fall under the same default tax regime.
What income from movable capital is subject to tax?
Taxable RCMs include financial products subject to tax, received by a taxpayer due to the holding or provision of movable capital. They consist of interest, dividends and similar income.
Interest and fixed income investment products
Are taxable in the RCM category interest from fixed income investmentsthat is to say those whose remuneration is determined in advance or calculable according to contractual terms. These include:
- bond interest;
- Treasury bills;
- negotiable debt securities;
- term accounts;
- interest paid by ordinary bank accounts.
Dividends and income distributed
Dividends paid to shareholders or partners of companies are taxable. They correspond to the distribution of social benefitsdecided by the competent bodies of the company, and are taxable whether paid in cash or in kind. Income distributed by collective investment organizations is also affected.
Income from shares and similar rights
Income from corporate shares, particularly in partnerships or certain unlisted structures, falls under RCM when it is not taxed in another category. This income can take the form of products distributedinterest on shares or remuneration assimilated to movable income.
Income from associate current accounts
Interest paid to partners in respect of sums left in a current account in a company constitutes taxable capital income. They pay for a loan granted by the partner to the company and are taxable as long as they exceed legally permitted limits or that they are actually perceived.
Income deemed to be distributed and similar benefits
These are the incomes that the tax authorities equates to distributions : hidden benefits, personal expenses covered by the company, or excessive remuneration of certain managers. These sums are taxable as RCM, as long as they reflect the provision of wealth for the benefit of a partner or shareholder.
Taxable financial products excluding exemption regimes
Finally, all financial products not benefiting from a specific exemption are taxable as RCM, in particular interest from unregulated investments or atypical financial contracts. Conversely, expressly exempt products (Livret A, LDDS, etc.) are excluded.
Income from movable capital exempt from tax
The exemption concerns interests regulated savings accounts, which are completely exempt from tax and social security contributions, as well as income earned within the framework of an Equity Savings Plan (PEA) when the duration conditions are met. Added to this:
- interest from certain old housing savings plans (PEL), still benefiting from total or partial exemption;
- capitalized financial income not yet made available to the taxpayer;
- various products benefiting from specific exemptions provided for by law, particularly in the context of savings schemes for economic or social purposes.
What is the summary declaration of securities transactions?
The summary declaration of securities transactions (RCM)
The RCM declaration is a tax document established by paying institutions (banks, financial intermediaries) listing all of the income from movable capital and, where applicable, securities transactions carried out by a taxpayer during a calendar year. It makes it possible to identify the nature of the income received and their tax regime.
Role and scope of the RCM declaration
Automatically transmitted to the tax administration and made available to the taxpayer, this declaration serves as the basis for pre-filling the annual income tax return. On a legal level, the RCM declaration contributes to securing the taxation of movable income, by ensuring the traceability of financial flows.
Taxation of Capital Income (RCM): dividends, fixed income and variable income investments
All income from financial investments is subject to tax in the RCM category, excluding those benefiting from an express legal exemption. These include the assets mentioned above.
RCM tax: PFU and social security contributions
Since January 1, 2018, RCMs are subject by default to a single flat-rate levy (PFU) at overall rate of 30 %compound :
- 12.8% for income tax;
- of 17.2% for social security contributions.
This deduction is made by the paying institution at the time of payment of income, in the form of a fixed non-dischargeable deductionconstituting an income tax advance. Social security contributions, for their part, are final.
Withholding tax on dividends paid to non-residents
Since January 1, 2026, dividends from French sources paid to non-tax residents are subject to a withholding tax applied systematically at the legal rate. This reform aims to secure the collection of tax at source and to strengthen the fight against situations of optimization or non-taxation of cross-border movable income.
Final taxation when filing income tax
The final taxation of RCM occurs during the annual income tax declaration, in the spring of the following year. The taxpayer must declare the gross amount of income receivedincluding those who have already incurred a withholding tax. If the amount collected exceeds the tax actually due, the excess is returned by the tax authorities.
The special regime of life insurance and capitalization contracts
Life insurance and capitalization contracts of more than eight years, for premiums paid after September 27, 2017, benefit from a reduced PFU rate of 7.5 %within the limit of an outstanding amount of 150,000 euros per taxpayer. Beyond that, the rate of 12.8% applies.
Exemption from non-discharging flat-rate withholding (PFNL)
Taxpayers whose reference tax income from the penultimate year is below certain thresholds can request an exemption from the non-final flat-rate withholding tax when paying their income. The thresholds are set at:
- 50,000 euros for a single person and 75 000 euros for a couple in terms of dividends;
- 25,000 euros for a single person and 50 000 euros for a couple for fixed income investments.
The request must be sent to the paying institution no later than THE 30 november preceding the year of receipt of income, by means of a sworn declaration.
Flat tax or progressive scale imposition for movable income?
It all depends on your situation, your objectives and the overall amount of your movable income.
The flat tax option
The flat tax (or single flat-rate levy, in force since January 1, 2018) has the advantage of imposing a fixed rate known in advance. This makes it easier to manage the earnings from your financial products. However, with the “flat tax”, you cannot deduct your expenses or benefit from specific reductions.
The option for the progressive scale and the reduction
The taxpayer can waive the PFU and opt for the progressive income tax scale. This option is global, annual and irrevocable for the year concerned. In this context, eligible dividends benefit from a automatic reduction of 40 %. In case of low income, this may result in a lower tax rate.
Choosing taxation on a progressive scale allows a certain flexibility and to benefit from reductions for the duration of detention. It is also possible to deduct certain expenses.
What is box 2OP for taxes?
Box 2OP of the income tax return allows the taxpayer to opt for the progressive scale income tax, instead of the PFU applied by default. By checking it, the taxpayer therefore waives the flat tax for the year concerned and subjects all of his movable income to the progressive scale.
Note that the amount of income from movable capital is pre-filled on income tax declaration no. 2042. If applicable, fill in boxes TR and BH.
How are income from foreign movable capital calculated?
Calculation of income from taxable foreign movable capital
Foreign RCMs are subject, in principle, to French tax rulesas long as they are received by individuals having their tax residence in France. It does not matter whether the income comes from French or foreign securities: it is the place of residence of the taxpayer that counts.
Thus, dividends, interest and similar income from foreign securities must be declared in France for their gross amountthat is to say before any foreign withholding tax. This income is taxed in the RCM category and subject to social security contributions.
Taking into account tax treaties and tax credits
In order to avoid situations of international double taxationFrance has concluded numerous bilateral tax conventions with other States. In the majority of cases, income from foreign movable capital has already been subject to withholding tax in the State of origin.
The applicable tax treaty may then give rise to a right to a tax credit attributable to French taxgenerally limited to the amount of French tax corresponding to this income. This tax credit is not a refund of foreign tax, but a mechanism intended to neutralize, totally or partially, double taxation.
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