French Withholding Tax
France has introduced new rules regarding withholding tax on the 1st of January 2013. The new system applies a flat but not final withholding tax (prélèvement forfaitaire non libératoire) on interest income and dividends received by individuals. The rates are 24% and and 21% respectively.
In addition to withholding tax, French residents are also subject to social charges. This is an additional tax to the withholding tax. This tax is further split in different components:
- Prélèvement CSG: 8.2%
- Prélèvement CRDS: 0.5%
- Contribution sociale permanente: 4.5%
- Prélèvement CAPS: 0.3%
- Prélèvement de solidarité: 2.0%
This is not a final tax like in Germany or Austria. The final taxation occurs at the time of income taxation. The withholding tax is used to offset (crédit d impôt) the due taxes.
France applies the European Savings Directive information exchange and reports European Savings Tax Income to the tax authority in the account holder s country of residence.