French Social Charges Rose in 2026: What the New 31.4% Flat Tax Means for Expat Investors
If you hold investments in France, or foreign investments taxed here, your tax bill on them went up at the start of 2026, and it's easy to miss because the change is buried in the social charges rather than income tax. The flat tax on investment income has moved from 30% to 31.4%. Here's what actually changed, which of your income is affected, and which is spared.
What changed, in one line
France levies "social charges" (prélèvements sociaux) on investment income on top of income tax. On capital income, those charges rose from 17.2% to 18.6%, driven by a 1.4-point increase in the CSG component (from 9.2% to 10.6%), under the 2026 Social Security Finance Act. The CRDS and the solidarity levy didn't move.
Because the flat tax (prélèvement forfaitaire unique, or PFU) is simply income tax of 12.8% plus these social charges, it has risen in step: 12.8% + 18.6% = 31.4%, up from 30%.
Which of your income is now taxed at 18.6%
The higher rate applies to most financial investment income, which is exactly the kind of income many expats hold:
dividends, interest and capital gains on securities (including on a foreign securities account);
gains on a PEA held more than five years, and PER payouts taken as capital;
crypto-asset gains;
furnished rental income taxed as non-professional furnished letting (LMNP).
That LMNP point is new and worth flagging: for the first time, furnished letting is treated differently from unfurnished letting for social charges, and it moves to 18.6%.
Which income stays at 17.2%
Not everything went up. These remain at the old 17.2% rate:
unfurnished rental income (revenus fonciers) and yield SCPIs;
property capital gains for individuals;
life insurance (both euro funds and unit-linked) and capitalisation contracts;
older home-savings plans and popular savings plans.
The life insurance point matters for anyone holding a policy: its social charges didn't change, so a life insurance contract under eight years old is still taxed at an overall 30%, not 31.4%. It's one reason the life insurance wrapper keeps a relative edge over a plain securities account.
When it takes effect
The timing splits in two:
For income taxed at the progressive scale (dividends declared at the scale, unfurnished rental income, certain long-term professional gains), the 10.6% CSG applies from 2025 income, declared in spring 2026.
For investment products taxed at the flat tax (dividends and interest under the PFU, securities capital gains, PEA, PER taken as capital, crypto), the new rate applies to events from 1 January 2026 onwards, the payment date for dividends, the sale date for capital gains.
A worked example
Take €1,000 of gross dividends on your securities account, taxed at the flat tax.
Before (30%): you'd pay €300 and keep €700.
Now (31.4%): you pay €314 and keep €686.
Fourteen euros on a thousand doesn't sound dramatic, and on a single dividend it isn't. But it's a permanent 1.4-point drag on every euro of dividends, interest and securities gains you realise, year after year, so on a sizeable portfolio it adds up, and it slightly changes the maths between holding assets directly and holding them inside a life insurance policy.
What this means if you're an expat
If you're a French tax resident, this applies to your worldwide investment income, including dividends and interest on accounts held abroad, which you already have to declare in France. So the higher rate reaches your foreign securities account just as it reaches a French one. If some of that income also suffered tax abroad, the usual foreign-tax-credit mechanism still applies, but the French social charges are now calculated on the higher 18.6% base.
The takeaway
The headline is simple: the flat tax on investment income is now 31.4%, not 30%, because social charges on capital rose to 18.6%. Dividends, interest, securities gains, crypto and LMNP income are hit; unfurnished rent, property gains and life insurance are not. For an expat with a diversified portfolio, it's not a reason to overhaul anything, but it is a reason to check how your income is split between the two rates, and whether a life insurance wrapper, still at 17.2%, deserves a bigger role.
Living in France and want to review your investments after the 2026 changes?
If you are an expatriate living in France and want to understand how the higher social charges affect your portfolio, your foreign accounts and your long-term plans, you can book a free introductory call to discuss your situation and identify the key points that should be checked.
Disclaimer: This article is for general information and educational purposes only. It is based primarily on official French government sources and other trusted references. It does not constitute personalised tax, legal or financial advice. Rates and rules may change, and the figures above may no longer be current when you read this. Tax outcomes depend on individual circumstances and the investments concerned.
