We can only provide a summary here, but we hope to develop the information and advice in due course.
Prior to 2013, for investment income such as government bonds and bank savings accounts you could either be taxed at source (called the Prélèvement Forfaitaire Libératoire - PFL ) at the rate of 24%, or declare the interest as part of your annual tax return.
Since 1st January 2013 the fixed rate option has been abolished; all the income is assessed according to your relevant marginal rate of income tax, as part of total income.
Nevertheless, in order to avoid a lag effect in the collection of revenue, interest earned in France is taxed at source at the rate of 24%, with final determination of the actual amount payable assessed as part of the tax return in the following year.
On application to your bank you can obtain waiver of this withholding tax on interest earned, provided your net income in the last year but one proceeding the year of taxation was lower than €25,000 (€50,000 for a couple).
If the interest earned is less than €2,000 you can also opt, at the time you make your tax return, discharge the liability to a withholding tax, to be taxed at the rate of 24%.
You will also be liable for social charges (prélèvement sociaux) at the rate of of 15.5%. They are deducted at source. The CSG element of the social charges is deductible against income tax at the rate of 5.1%.
There are some regulated bank savings accounts that offer tax breaks, which you can read more about in our Banking in France pages. Broadly speaking, the accounts are free from income tax and social charges.
In relation to dividends, broadly speaking, the same rules apply as those for other savings.
All the income will be assessed according to your relevant marginal rate of income tax, as part of total income.
Nevertheless, in order to avoid a lag effect in the collection of revenue, dividends are taxed at source at the rate of 21%, with final determination of the actual amount payable assessed as part of the tax return in the following year.
You can opt for waiver of this tax if your net income in the in the last year but one proceeding the year of taxation was lower than €50,000 and (€75,000 couple).
Social charges at the rate of 15.5% are payable. Again, the CSG element of the social charges is deductible against income tax at the rate of 5.1%.
The social charges are levied on the gross dividend.
This is not the case with income tax, as a 40% abatement is applied before income tax is charged. The 40% abatement is not applied as part of the withholding tax, but following submission of your tax return.
Majority shareholder company owners who use dividends as a method of remuneration are subject to the full panoply of social security contributions at the rate of average rate of around 45% on these dividends.
The social security contributions apply where majority shareholders in a company receive dividends exceeding 10% of the share capital of the company. That fraction below 10% will continue to be subject to only 15.5% social charges.
You can read more about the taxation of dividends in our pages on Starting a Business in France.
Since 2013 the capital gain on the sale of shares is taxed as part of the income tax system, with relief granted for the number of years the shares have been held.
Relief is granted at the rate of 50% for shares held between 2 and less than 8 years and at 65% if held 8 or more years.
There is no relief on the social charges, which amount to 15.5% of the gain.
There are also variable rate tax savings schemes, notably assurance vie, Fonds Communs Placement, Plan d’Epargne Populaire, Plan d’Epargne d’Entreprise, and Plan d’Epargne en Actions.
There are minimum investment periods with these schemes, so if you withdraw before the expiry date, you lose the benefit of the tax concession.
You also need to have regard to the entrance and exit fees that are payable.