Flat Tax (PFU): Who Qualifies and What You Get
Learn how the Flat Tax affects your investment income in France and whether the fixed rate is the best option for your financial situation.
The Flat Tax, also known as the Prélèvement forfaitaire unique (PFU), is a fixed tax rate applied to income earned from investments.
Who it's for
This scheme applies to all individual investors who are residents of France for tax purposes.
What you get
You receive a simplified tax treatment on your investment income. Instead of a complex calculation, a single fixed rate of 30% is applied. This total is made up of two parts: a portion for income tax and a portion for social charges.
What it costs you
The tax is typically collected automatically through withholding by your financial brokers. However, you are still required to include this information in your annual tax return.
The catch to know
The flat rate is not mandatory for everyone. If your personal income tax rate is lower than the 12.8% portion of the flat tax, you can choose to be taxed using the standard progressive income tax scale instead.
How to apply
- Manage your investments through a financial broker.
- Ensure your broker handles the automatic withholding of the tax.
- Report your investment income during your annual tax filing period.
- Review your tax situation to decide if the progressive scale is more beneficial for you.
For more details, visit the official portal: https://www.impots.gouv.fr