(The indications below apply to dividends paid since 2018 (tax return filed in 2019 and tax due in 2019)1
Dividends paid to individuals French resident
Dividends received by French resident taxpayers are subject to a flat tax at the rate of 12.8%, plus the additional social security levy at the rate of 17.2%, i.e an overall taxation of 30%. The tax payable is the same regardless of whether the shareholder chooses to be paid in cash or in shares (where the Bank offers this option).
However, tax payers may opt for taxation at the progressive scale for income tax. This option is global and concerns all the taxpayer's income from investment income. It is exercised when the tax return is filed.
In both cases, taxation is levied in two stages:
At the time of payment: a 12.8% advance income tax payment
When dividends are paid, an advance payment for income tax of 12.8% is deducted at source by the paying agent calculated on the gross amount of the dividends, as well as the additional social security levy at the rate of 17.2%. These deductions are mandatory.
The 12.8% deduction is not applicable if shares are held within an equity savings plan (PEE, PEA, PEA-PME).
Taxpayers whose taxable income is less than EUR 50,000 (in the case of single, divorced or widowed taxpayers) or EUR 75,000 (in the case of taxpayers taxed jointly as a household) may request an exemption from the 12.8% deduction.
An exemption request must be submitted, under the taxpayer's responsibility, no later than 30 November in the year preceding that of the dividend payment.
The year following the payment of dividends: final taxation
- Flat tax
The 12.8% initial deduction levied at the time of dividend payment becomes a definitive tax.
- Option for the taxation at the progressive scale of income tax
A 40% allowance on the gross dividend is then applicable. The 12.8% deduction operated by the paying agent is chargeable against the tax due on this basis. Any excess is returned.
Dividends paid to non French residents
Dividends paid to individuals who do not reside in France are subject to a withholding tax at the 12.8% upper rate.
However, regardless of the beneficiary's place of residence, a 75% withholding tax is levied if dividends are paid in a non-cooperative state or territory.2
(1) Unlike salaries and wages, this income is not subject to withholding tax at source, which came into force on 1 January 2019
(2) 2018 list of NCST: (this list is updated on a yearly basis): Botswana, Brunei, Guatemala, Marshall Islands, Nauru, Niue and Panama.