Estimate the Prélèvement Forfaitaire Unique (PFU) — France's 31.4% flat tax on dividends, interest, and investment gains (2026).
The Prélèvement Forfaitaire Unique (PFU), or 'flat tax', is a single combined rate applied to dividends, interest, and gains from selling securities (shares, funds). The 2026 Finance Act raised the combined rate to 31.4% (12.8% income tax + 18.6% social charges).
Illustrative estimate only, using simplified/rounded 2026 French tax figures — not tax advice. Always confirm with impots.gouv.fr or a licensed tax/financial advisor.
The Prélèvement Forfaitaire Unique (PFU), often called the "flat tax," offers a simplified alternative to the progressive income tax scale specifically for investment income — dividends, interest, and most capital gains on financial securities. It combines a 12.8% income tax component with the social levies (CSG/CRDS and related contributions), for a long-standing combined headline rate of 30%; following the 2026 rise in the social-levy component on capital income, the effective combined rate for many types of investment income moved higher, toward roughly 31.4%.
Taxpayers are not locked into the PFU — anyone can instead opt to have investment income taxed at the ordinary progressive income tax bands plus the standard social levies, which is worth doing if your marginal income tax rate is below the PFU's built-in 12.8% income tax component (broadly, taxpayers in the 0% or 11% bands often come out ahead opting out of the PFU).
It is the default treatment, but taxpayers can elect, on their annual return, to have investment income taxed instead under the ordinary progressive scale plus standard social levies — a choice that generally only benefits lower-income taxpayers whose marginal income tax band is below the PFU's built-in rate.
It applies broadly to interest, dividends, and gains on the sale of shares and securities, but real estate capital gains follow an entirely separate regime with its own rates and taper relief, not the PFU.
A 2026 reform raised the social-levy (CSG) component applied to capital income specifically, which pushed the combined PFU rate for many investment income types from the long-standing 30% headline figure toward roughly 31.4%, even though the 12.8% income tax portion stayed the same.
No — a PEA is a tax-advantaged wrapper broadly similar in spirit to a UK ISA, and gains and dividends held within it are shielded from income tax (though social levies still apply on withdrawal), which is why PEAs are widely used by French investors to avoid the PFU on qualifying investments.