Same money, different tax

In France, the account you use matters as much as the return you earn. Some savings are completely tax free, some get a lighter tax after a holding period, and the rest fall under a flat tax. Here are the three you will meet most often.

The Livret A

The Livret A is the best known regulated savings account. The interest is free of income tax and social charges, and the rate is set by the government, not the bank.

  • The deposit ceiling is €22,950 per person.
  • You can withdraw at any time.
  • Because the interest is tax free, the rate you see is the rate you keep.

It is a good home for your emergency fund. Check the current rate on service-public.gouv.fr, since it is reviewed twice a year.

The PEA

The Plan d'Épargne en Actions is a share savings plan for European equities and funds. You can pay in up to €150,000.

  • If you withdraw in the first five years, the plan is normally closed and gains are taxed under the flat tax.
  • After five years, gains are free of income tax. Only social charges are due.
  • After five years you can take money out without closing the plan.

Because the tax saving builds with time, the PEA suits long term investing. It does not suit money you may need in the short term.

The flat tax (PFU) and the two social charge rates

Most investment income is taxed under the prélèvement forfaitaire unique, usually called the PFU. It has two parts: 12.8% income tax, plus social charges (prélèvements sociaux).

For 2026 the social charges now come in two rates:

  • 18.6% (standard rate): CSG 10.6%, CRDS 0.5% and the solidarity levy 7.5%. It applies to dividends, bond interest, gains on standard shares and securities, and furnished rentals. With the 12.8% income tax, the PFU is 31.4%.
  • 17.2% (protected rate): CSG 9.2%, CRDS 0.5% and the solidarity levy 7.5%. It still applies to life insurance (assurance-vie), home savings plans (PEL), unfurnished rental income and property capital gains. The default flat tax on these is 30%.

The CSG rise from 9.2% to 10.6% applies to financial investment income from 1 January 2026. For property type income it applies to 2025 income, declared in spring 2026.

Choosing the progressive scale instead

You can opt out of the flat tax and have the income taxed at the progressive scale (box 2OP on your return). In that case, the deductible part of the CSG stays at 6.8%. This can pay off if your income is low, but the choice covers all your investment income for the year.

Residents of other EU countries

People living in the EU, the EEA or the UK who are covered by their home country's social security system, not the French one, are exempt from CSG and CRDS. They pay only the 7.5% solidarity levy on French source property and investment income.

The 2026 rates at a glance

| Wrapper | Income tax | Social charges | Total | |---|---|---|---| | Standard account (shares, dividends, interest) | 12.8% | 18.6% | 31.4% (flat tax) | | PEA held under 5 years | 12.8% | 18.6% | 31.4% (flat tax) | | PEA held over 5 years | 0% | 18.6% | 18.6% (social charges only) | | Life insurance under 8 years | 12.8% | 17.2% | 30% | | Life insurance over 8 years | 7.5% | 17.2% | 24.7% |

The 17.2% protected rate applies to life insurance and capitalisation contracts, not to the PEA. For PEAs opened since 1 January 2018, the social charge rate in force when you withdraw (18.6% in 2026) applies to all the gains.

A simple comparison

You make €1,000 of gains:

  • In a Livret A: you keep €1,000.
  • In a PEA after five years: 0% income tax and 18.6% social charges, so you keep €814.
  • On shares in a standard account, or a PEA closed early: 31.4% flat tax, so you keep €686.
  • In life insurance under eight years: 30%, so you keep €700.
  • In life insurance after eight years: 24.7%, so you keep about €753. If the gains fall within the yearly allowance (€4,600 for one person, €9,200 for a couple), only the 17.2% social charges apply and you keep €828.

A worked example: life insurance withdrawal

Say you are single and put €50,000 into an assurance-vie contract. Ten years later it is worth €70,000, and you withdraw all of it. Your gain is €20,000.

  • Social charges: 17.2% of €20,000 is €3,440.
  • Income tax: after eight years, the first €4,600 of gains is allowed tax free for one person. The remaining €15,400 is taxed at 7.5%, which is €1,155. This low rate applies to premiums up to €150,000.
  • Total tax: €4,595, so you keep €15,405 of the gain. That is an effective rate of about 23%.

If you had taken the same money out in year six, the flat rate would apply instead. Income tax of 12.8% is €2,560 and social charges are €3,440, so the total is €6,000 and you keep €14,000. Waiting two more years saves about €1,400 on this contract.

A couple with a joint contract gets a €9,200 allowance, which would bring the income tax in this example down to €810. If part of your money is in the euro fund, social charges on those gains are usually taken out each year, so the amount due when you withdraw can be lower. Your insurer's annual statement shows what has already been paid. These figures are an illustration, not tax advice, so check your own position on impots.gouv.fr or with an adviser.

How to choose

  • Emergency money: Livret A.
  • Money you will not touch for five years or more: PEA.
  • Everything else: expect the flat tax, and look at the life insurance contract (assurance vie), which has its own rules after eight years.

Check the rates

These rates are set by law and the 2026 change shows how quickly they can move. Always confirm the current rates on impots.gouv.fr before you decide, and use our compound interest calculator to see how the tax drag affects your balance over time.