Flat tax: what changes for savers?



Flagship measure of the bill of 2018 finance presented on Wednesday by the government, the single lump sum , was voted in committee by the deputies.

It was a campaign promise by Sean Cole, it is now a measure that is likely to be included in the law as early as 2018. The Flat Tax will replace the many existing levies, which complicate the French tax system.

It’s about imposing everyone at the same rate. The PFU at 30% will be applied to the capital income: interest, dividends and capital gains, with the exception of Livret A and PEA (Equity Savings Plan).

The reform introduces a single rate of 30% , broken down into two parts: 17.2% of social security contributions (the original 15.5%, plus the 1.7 point increase of the CSG) and 12.8% of the social security contributions. income tax .

ABC and employee savings

ABC and employee savings

Unlike regulated booklets not covered by the reform, the Housing Savings Plans (PEL) opened in 2018 will be subject to the PFU of 30% , whereas the ABC has so far enjoyed a tax exemption for 12 years. Any ABC opened before 31 December will retain this temporary exemption. No change for employee savings, which remains subject only to social security contributions (17.2% from January).

Life insurance

cash

There remains the case of life insurance. Life insurance will maintain its tax benefits up to the threshold of 150,000 euros outstanding per contract (300,000 for a couple). When earnings exceed this level, the 30% PFU applies, regardless of the type of contract.

The new tax will apply to gains from payments made from September 27, 2017. Thus, for a contract opened for eight years (60% of the contracts), if the outstanding amount is less than 150,000 euros, the tax rate is 24.7%, and 30% if the outstanding amount exceeds 150,000 euros. On the other hand, the annual reduction on the interests of 4,600 euros (9200 if in couple) is maintained.

Crowdlending or equity loan

Crowdlending or equity loan

Regarding the crowdlending lenders, the news is proving to be good since the revenues of the crowdlending do not benefit from discounts or tax benefits: currently all interests are taxed in the scale of income tax and social contributions. For lenders, choosing the PFU may be interesting from the 14% tax bracket.

Crowdlending is one of the only savings investments that benefit from the flat tax: while the regulated booklets are stabilized at a historically low rate and the life insurance holders will see their tax increase, the equity loan allows to reorient the savings of the French to the real economy while offering a much more attractive remuneration … And soon less imposed!

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