Dividends and capital gains in a Plan d'épargne en actions (PEA) Account are exempt from French income tax and social security contributions as long as they are reinvested or held in the PEA Account.
When the PEA Account is closed or funds are withdrawn from the PEA Account, the net taxable gain (PEA net asset value - total amount paid in) allowable to the amount withdrawn would be subject to social security contributions in France. In addition, depending on when the PEA Account is closed or funds withdrawn from the PEA Account and the reason for the withdrawal, the net taxable gain could also be subject to capital gains tax in France. The table below summarizes the general tax consequences in France upon a withdrawal or closure of the PEA Account:
| Type of Withdrawal | Withdrawal Leads to PEA Account Closure? | Withdrawal Subject to French Social Security Contributions? | Withdrawal Subject to French Capital Gains Tax? | |||
| Withdrawal Before Fifth Anniversary of First Cash Deposit into the PEA Account | ||||||
| * To fund the creation or takeover of a company | No | Yes IBIE will withhold from the withdrawn amount at the applicable rate of French social security contributions and remit such amount to the French Tax Authority. | No | |||
| * Due to redundancy, disability, or early retirement of the PEA Account holder (or his/her spouse or PACS partner) | No | Yes It will be the sole responsibility of the PEA Account holder to report and pay the applicable taxes to the French Tax Authority upon such withdrawal. | Yes It will be the sole responsibility of the PEA Account holder to report and pay the applicable taxes to the French Tax Authority upon such withdrawal. | |||
| * Any other withdrawal before the Fifth Anniversary | Yes | Yes It will be the sole responsibility of the PEA Account holder to report and pay the applicable taxes to the French Tax Authority upon such withdrawal. | Yes It will be the sole responsibility of the PEA Account holder to report and pay the applicable taxes to the French Tax Authority upon such withdrawal. | |||
| Withdrawal After Fifth Anniversary | ||||||
| No | Yes IBIE will withhold from the withdrawn amount at the applicable rate of French social security contributions and remit such amount to the French Tax Authority. | No |
The material above is for general information only and is not intended to serve, and should not be construed as, tax advice. Please consult your own tax advisor.
The material contained herein is for general information only and is not intended to serve, and should not be construed as, tax, legal or investment advice. Please consult your own advisors.