impots.taxFRENCH TAX MONITOR

FLAT TAX / PFU

FLAT-RATE WITHHOLDING TAX REPORT

Data 2025

The Prélèvement Forfaitaire Unique (PFU), known as the 'Flat Tax', was created in 2018 to simplify capital taxation. One rate, one operation. It was beautiful. It was simple. Which is why the State decided to complicate it in 2026 by increasing the CSG on investment income.

PREVIOUS RATE / 2025 PRODUCTS WITHHELD

Flat income tax12.8%
Social levies17.2%
Total PFU30%

RATE UPDATED APRIL 24, 2026

Flat income tax12.8%
Social levies18.6%
Total PFU31.4%

2026 CHANGE

The CSG on financial capital income rises from 9.2% to 10.6%, bringing total social levies from 17.2% to 18.6%. For income under the ordinary PFU, the total is now 31.4%: 12.8% income tax + 18.6% social levies.

SCOPE OF APPLICATION

  • ▸ Dividends
  • ▸ Interest
  • ▸ Capital gains on securities (stocks, bonds, funds)
  • ▸ Crypto capital gains (upon conversion to euros, exemption threshold: €305/year in disposals)

EXCEPTIONS

Some products retain 17.2% social levies: life insurance and capitalization contracts with surrender value, CEL opened through December 31, 2017, PEL opened through December 31, 2017 during their first 12 years, and exempt PEP products. Rente-survie and epargne handicap contracts are at 18.6%.

PROGRESSIVE SCALE OPTION

You can choose the progressive scale instead of the Flat Tax for investment income and securities capital gains (box 2OP on the tax return). The option remains global; as of 2026, the tax administration says its irrevocable character has been removed. It can be advantageous if your marginal rate is ≤ 11%. For dividends, a 40% allowance applies only with the progressive scale.

FREQUENTLY ASKED QUESTIONS — FLAT TAX

What is the flat tax rate in France in 2026?
As of April 24, 2026, the ordinary PFU is 31.4% for covered financial income: 12.8% income tax + 18.6% social levies. The old 30% total still matters for products that keep 17.2% social levies, and for most investment products already withheld when paid in 2025.
When should I choose the progressive scale over the flat tax?
When your marginal tax rate is 11% or lower. For dividends specifically, the progressive scale grants a 40% allowance. Check box 2OP on your return; the option is global for the relevant income, and impots.gouv.fr says that from 2026 its irrevocable character has been removed.
Does the flat tax apply to cryptocurrency?
Yes. Private crypto-asset gains are taxed at the 31.4% PFU as of April 24, 2026: 12.8% income tax + 18.6% social levies. The progressive-scale option is made through box 3CN and is independent from the 2OP option for investment income.
Why is the flat tax increasing in 2026?
The CSG (social contribution) on financial income rises from 9.2% to 10.6%, pushing total social levies from 17.2% to 18.6%. The income tax portion stays at 12.8%. So the 'Flat Tax' goes from 30% to 31.4% — because 30% apparently wasn't enough.

Source : impots.gouv.fr (investment income, securities capital gains, crypto-assets), Loi n°2025-1403 (LFSS 2026)

Last updated: Avril 2026