What is flat tax or pfu in France?
A single rate tax conducive to investments
The unique lump sum (PFU), or flat tax, is a tax measurement which was set up by the 2018 finance law under the leadership of Emmanuel Macron. Its objective is to Simplify savings taxation And thus to facilitate investments. The rate of the PFU being fixed in a lump sum, it does not depend on the personal situation of the taxpayer. Neither the marginal tax tranche nor the reference tax income is taken into account. Consequently, for a majority of taxpayers, the establishment of this levy makes it possible to reduce the amount of their tax. The PFU applies automatically. However, taxpayers can choose to remain subject to the progressive income tax scale.
Income from movable capital, capital gains on the sale of securities, PEA .. the financial investments concerned
Flat tax applies to different types of financial investment:
- Income from movable capital: dividends (shares and shares paying a variable return) and fixed income investments (term accounts, deposit, obligations, debt securities …),
- capital gains on the transfer of securities subject to income tax,
- income from a PEA (only in the event of withdrawal before 5 years),
- income from a housing savings account (CEL),
- income from a housing savings plan (PEL),
- Interests from payments made on life insurance contracts since September 27, 2017.
What are the types of income not subject to PFU?
On the other hand, the flat tax does not apply to the following financial products:
- Savings plans (PEA) after five years of detention.
- Land income subject to income tax scale.
- The premiums of life insurance contracts paid before September 27, 2017.
- Employee savings.
- Revenues from regulated savings products: Booklet A, LEP, Young booklet, LDDS.
- The interests of PEL and CEL subscribes before 2018 (until their 12th birthday only for PEL).
What is the unique flat -rate levy for?
The purpose of the PFU aims to simplify the taxation of capital income. Since its entry into force in 2018, flat tax has helps taxpayers to Better anticipating the taxation of their income generated by certain financial investments. It replaces the old tax regime which included several sections and different rates depending on the income. Which could make taxation complex and less transparent.
What is the rate of flat tax in 2025?
A single rate of 30 %
Since its establishment in 2018, the flat tax rate has been 30 %. He understands:
This is a lump sum rate, which means that it does not depend on the taxpayer’s taxation or its reference tax income. The latter can thus pay social and tax obligations at the same time.
An increase in discussion
Since its implementation in 2018, each year, amendments to the finance bill have offered an increase in flat tax. And 2025 is no exception to the rule. According to an article of September 30 of “Les Echos”, Sébastien Lecornu, the new Prime Minister, is considering increasing the single lump sum to participate in the reduction of the public deficit. Its overall rate could then rise to 36%. For his part, Matignon refuses to confirm and specifies that “nothing is arbitrated.”
Who is affected by the flat tax?
Flat tax concerns people perceiving income from their financial assets. It relates to the gains drawn from the detention of capital, mainly interestsTHE dividends and capital gains. This tax mode can apply when a taxpayer:
- holds actions in a company and that it affects dividends (within the framework of a SAS, a LLC, a EURL or even a SASU);
- sells actions and achieves added value as partner;
- has a bank account or a savings product reporting interest.
How and when to pay the flat tax on dividends?
The PFU applies to gains received from January 1, 2018. Its levy mode varies depending on the type of financial product and the date on which the event generating.
Taxation on movable income (dividends, interests, products) when paying income
Regarding movable income (interests, products or dividends), flat tax intervenes At the time of income payment ::
- Income is the subject of a non -liberating fixed levy of 12.8 % The year of their payment, as a deposit of income tax.
- The final taxation comes at the time of the declaration of income.
Approach to pay the tax
Concretely, in 2025, the taxpayer must:
- Indicate the gross amount of its eligible income in the boxes corresponding to the nature of the income and in the “income already subject to social security contributions without deductible” of the income tax declaration 2024.
- include the 12.8 % deposit In the “Tax credit equal to the non -release tax credit hut made in 2024”.
If there is a surplus, it will be reimbursed by the tax administration.
How does PFU work on securities and life insurance?
Pfu and capital gains on securities
Flat tax is calculated on the amount of capital gains made when the taxpayer sells titles As part of the management of its assets, after imputation of possible losses. The losses made are deductible from the capital gains of the year and are attributable to the capital gains made over the following ten years. The PFU is deducted from capital gains on securities at the time of payment of income tax.
PFU and life insurance
The single flat-rate levy is applicable to life insurance in the event of partial or total redemption by the insured of the gains relating to the payments made since September 27, 2017. First, a non-liberating flat-rate levy is applied. He rises to:
- 12.8 % when paying the redemption for contracts under eight years;
- 7.5 % when paying the buyout for contracts over eight.
Then, the final taxation occurs the following year, at the time of the income tax declaration at the flat rate of:
- 12.8 % for contracts under the age of eight;
- 7.5 % on products corresponding to payments going up to 150,000 euros for contracts over eight years;
- 12.8 % on products corresponding to payments exceeding the threshold of 150,000 euros For contracts over eight.
Added to this flat -rate taxation, social security contributions at the rate of 17.2 %.
Flat tax or progressive tax scale: what to choose?
Opt for the progressive scale if the rate of the PFU is higher than the highest tax of taxation
The taxpayer has the possibility of opting for the taxation of these products to the progressive income tax scale if he prefers. The choice depends on the taxpayer’s marginal tax tranche (TMI, namely the rate applying to income located in the highest tax bracket). If the flat rate of flat tax (30 %) is higher than that of the highest tranche, the income tax option will be more attractive.
Choosing to be imposed according to the progressive scale of income tax is irrevocable and applies to all income and gains subject to flat tax.
Check the 2042 income declaration 2042 to not be subjected to flat tax
The PFU applying automatically, the taxpayer must check box 20p of the 2042 income declaration if he wishes to benefit from the progressive scale.
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