The new French “Flat tax”: what exactly is it? Does it concern me?

VAT regimes

French flat tax

On January 1st 2018, taxation on capital in France was subject to a number of changes. But what exactly is this new “flat tax system”? How does it concern me?

Do I have to pay the Flat tax?

This tax only applies on “capital revenues”. In other words, these are revenues that come from interests, dividends, or selling shares at a higher price than you bought them. Of course, if you have no such revenue, this tax doesn’t concern you!

How does it work?

Before, you could have a tax of anywhere from 0% to 45% on these revenues, on top of an additional 17.2% in social contributions. Now, you just have to pay 30% total (17.2% in social contributions + 12.8% in income tax), no matter what your revenue is.

Is it more advantageous?

Of course, it depends on what exactly your situation is, but generally, the higher the revenue, the more likely it is that you benefit from this change. At the very least though, considering how taxation was different for interests, dividends, shares, and that it all depended on your revenue, it’s definitely simpler

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