Question 1

What is the flat tax (PFU)?

Accepted Answer

The flat tax (PFU) is an overall rate of 30% applicable to capital income since 2018. It breaks down into 12.8% income tax and 17.2% social contributions (CSG-CRDS). It's the default regime but you can opt for the progressive income tax scale if more advantageous for your overall situation. This option is irrevocable and applies to all your capital income for the year.

Question 2

How does the holding period allowance work?

Accepted Answer

The holding period allowance only applies to securities acquired BEFORE January 1, 2018 and only if you opt for the progressive scale. It is 50% for 2-8 years holding and 65% beyond 8 years. For retiring executives, a reinforced allowance of €500,000 may apply under conditions. Note: this allowance only applies to the income tax portion; the 17.2% social contributions apply to the full capital gain.

Question 3

Can you deduct capital losses?

Accepted Answer

Yes, capital losses from securities sales can be offset against capital gains of the same nature realized in the same year or during the following 10 years. Offsetting is first applied to current year gains, then the unused balance is carried forward. Important: capital losses can only be deducted from securities capital gains, not from other income.

Stock Capital Gains Tax 2026 | Free

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