France has introduced new rules regarding withholding tax on the 1st of January 2013. The new system applies a flat but not final withholding tax (prélèvement forfaitaire non libératoire) on interest income and dividends received by individuals. The rates are 24% and and 21% respectively.
In addition to withholding tax, French residents are also subject to social charges. This is an additional tax to the withholding tax. This tax is further split in different components:
- Prélèvement CSG: 8.2%
- Prélèvement CRDS: 0.5%
- Contribution sociale permanente: 4.5%
- Prélèvement CAPS: 0.3%
- Prélèvement de solidarité: 2.0%
This is not a final tax like in Germany or Austria. The final taxation occurs at the time of income taxation. The withholding tax is used to offset (crédit d’impôt) the due taxes.
France applies the European Savings Directive information exchange and reports European Savings Tax Income to the tax authority in the account holder’s country of residence.