PER: The super tax advantage of the retirement savings plan in danger

Is the main tax asset of the Retirement Savings Plan (PER) threatened? The Court of Auditors points out, in a report, the shortfall for the State from the tax deduction of payments.

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New thunderbolt for the PER. After his inheritance advantage was called into question at the beginning of October by a parliamentary report, it is now up to his tax relief system to be in the sights of the Court of Auditors. As a reminder, the advantage of this savings product – which has just celebrated its 5th anniversary – is to allow individuals to prepare additional income for retirement, while reducing their taxes each year. Concretely, the amount of payments made to a PER can be deducted from taxable income, within the limit – for employees – of 10% of their annual income.

To put it simply, with a net income of 50,000 euros, you can for example deduct up to 5,000 euros from your tax base, provided you contribute the same amount to your retirement savings plan. By opting for this advantage (“on entry”), the saver will, however, have to pay income tax when recovering their capital (“on exit”). If it is therefore in reality a tax deferral, the shortfall for the State nevertheless turns out to be significant for the Court of Auditors, for three reasons.

A shortfall in tax revenue estimated at 1.8 billion euros per year for the State

First of all, “the reduction in income upon retirement will allow some savers to be taxed upon exit at a lower marginal rate than that which would have been applied to them in the year of the contribution deduction”points out the report. The rue Cambon institution also notes that to compensate for the shortfall in tax deduction on payments, the State (“whose budget is structurally in deficit”) is forced to borrow on the financial markets, and currently at high rates. Finally, the gains generated by the contract are subject to the single flat-tax levy of 30%, including 12.8% for income tax, including for taxpayers who would be at a TMI superior, generating, again, a shortfall in earnings, which in total is estimated at 1.8 billion euros per year.

To replenish the coffers of the Public Treasury, two shock solutions are envisaged by the report. First, reduce the amount of the annual deduction ceilings. If the Court does not make a quantified proposal, we can imagine that the general deduction ceiling could, for example, drop to less than 10% of annual net income. The report also offers “to review the possibilities of carrying over the deduction ceilings from one year to the next”. Currently, a saver can, if he has not used all of his deduction ceilings over the last three years, combine them to deduct more over one year.

Measures which could ultimately prove counterproductive for Joseph Choueifaty, co-founder of the Goodvest savings platform, which markets a PER: “this questioning of the tax advantage is extremely serious, it risks breaking the dynamics of a product which had achieved better success than expected.” Often put forward by PER distributors, the tax deduction upon entry is in fact presented as a counterpart to blocking one’s capital until retirement. As a bonus, “It also allows savers to make an additional saving effort, by encouraging them to invest the money that they will ultimately recover with the tax reduction. Not to mention that part of these flows is directed towards the real economy (particularly since the green industry lawEditor’s note)»recalls the expert. Arguments that professionals will not hesitate to put forward soon if the report results in a reform project.