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French Withholding Tax #france #withholding #tax


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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.

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