A PEA is a special securities account associated with a current account through which individuals resident in France can invest under favourable tax conditions, especially in the securities of companies that have their registered office in France (3).
Although the normal lifespan of a PEA is eight years, the tax benefits kick in at the end of the plan's fifth year. The maximum investment in cash is EUR 150,000 per plan (a couple can take out two plans).
If BNP Paribas shares are held within a PEA, the dividends can only be paid to the current account linked to the plan.
Provided that no withdrawals have been made before the end of the fifth year, capital gains and dividends are exempt from tax definitively (other than social security contributions, which are calculated each year on the gains realised but paid when the plan is closed).
Moreover, on closing a PEA held for more than five years that is showing a capital loss, under certain conditions this loss can be offset against capital gains on disposals of transferable securities and shares realised during the same year or during the following ten years.
- Donation of securities held under a PEA
A donation of securities held within a PEA before the end of the fifth year is treated as a withdrawal and thus entails the closure of the plan and the corresponding taxation of the dividends and the capital gains realised during the PEA's lifetime.
If the donation is made between the sixth and eighth year, it results in the closure of the plan but does not generate an income tax liability (only social security contributions are due).
If the donation constitutes only a partial withdrawal from the PEA and takes place after the end of the sixth year, it does not result in the closure of the plan, generating only a social security contribution liability.
(3) The shares of companies that have their registered office in an EU member state, Iceland, Norway or Liechtenstein are also eligible.