# The Flat Tax in 2026: What Changes If You Invest

> The flat tax rises to 31.4% in 2026 (12.8% + 18.6%). PFU, the income-tax-scale option, the PEA: what you need to know if you invest. Worked examples.

*Updated 2026-06-09*

## In short

- In 2026, the flat tax (PFU) on gains in a brokerage account is 31.4%, made up of 12.8% income tax plus 18.6% social levies.
- The increase comes from the social levies, which rose from 17.2% to 18.6% on 1 January 2026 via the 2026 social security financing law.
- If your top tax bracket is low, opting for the progressive income tax scale (box 2OP) can be more advantageous, with a 40% allowance on dividends and deductible CSG.
- The PEA stays the wrapper to favour: income tax exemption after 5 years, with only the 18.6% social levies applying.

## What exactly is the flat tax? (the PFU in 30 seconds)

The flat tax is the common name for the **prélèvement forfaitaire unique** (PFU), France's single flat-rate levy. It's the tax that applies by default, without you having to do anything, on most of the income your invested money earns: **dividends** (the share of profits a company pays out to its shareholders), **interest**, and **capital gains** (the profit you make when you sell an investment for more than you paid for it).

In practice, as soon as you invest through an ordinary **brokerage account** (compte-titres ordinaire, or CTO), a standard wrapper for buying stocks or ETFs, this flat tax applies to your gains. A single rate, the same for everyone, regardless of your income level. That "flat" character is what made it popular: simple to understand, predictable.

If you're just starting out and still hesitating over which wrapper to open, take a look at our comparison [PEA vs brokerage account: which to choose when you're starting out?](/en/blog/pea-vs-brokerage-account-which-to-choose) before going further.

## The 2026 rate: 31.4%, and how it breaks down

**In 2026, the flat tax on investment income and capital gains on securities is 31.4%.**[\[1\]](#source-1) That's the figure to remember if you invest through a brokerage account. If you've read "30%" somewhere, that's the old rate that applied until 2025\. It has changed.

### 12.8% income tax + 18.6% social levies = 31.4%

The flat tax is made up of two building blocks:

* **12.8% income tax**, the part that goes straight to the tax authorities. It hasn't moved: it stays set at 12.8%.[\[2\]](#source-2)
* **18.6% social levies** (prélèvements sociaux: CSG, CRDS and the like), the part that funds social protection.[\[1\]](#source-1)

Add the two together: 12.8 + 18.6 = 31.4%.

### Why the rate went up in 2026

The increase comes entirely from the **social levies**, which rose from 17.2% to 18.6% on 1 January 2026, an increase of 1.4 points.[\[3\]](#source-3) It's down to a rise in the CSG rate on capital income (from 9.2% to 10.6%), provided for by the **2026 social security financing law** (loi de financement de la sécurité sociale pour 2026).[\[3\]](#source-3)

The exact text, if you want to trace it back to the source: **Law No. 2025-1403 of 30 December 2025 on social security financing for 2026** (LOI n° 2025-1403 du 30 décembre 2025 de financement de la sécurité sociale pour 2026).[\[4\]](#source-4) The income tax part (12.8%), for its part, was left untouched.[\[2\]](#source-2)

A small caveat: this 18.6% rate concerns financial income (dividends, interest, capital gains on securities). Some other capital income, such as rental income, doesn't follow exactly the same social levy scale. For an article focused on the stock market, remember 31.4%; for rental property, check on a case-by-case basis.

### A worked example: €1,000 of gains in a brokerage account

Imagine you sell some stocks in your brokerage account and pocket **€1,000 in capital gains**. Here's what the flat tax takes:

| Item               | Rate      | Amount   |
| ------------------ | --------- | -------- |
| Income tax         | 12.8%     | €128     |
| Social levies      | 18.6%     | €186     |
| **Total flat tax** | **31.4%** | **€314** |
| **What you keep**  |           | **€686** |

On €1,000 of gains, you keep €686\. That's the default rule, automatic, with nothing to tick.

## The classic beginner mistake: believing the flat tax is always the best option

The flat tax is simple, so people tend to assume it's necessarily the most advantageous. That's the most common mistake when you're starting out. The reality: in certain situations, especially if you pay little or no income tax, the **progressive income tax scale** (barème progressif, the standard bracket-by-bracket taxation, the one on your payslip) can cost you less.

### The option to be taxed on the income tax scale (box 2OP)

You can give up the flat tax and ask for your gains to be taxed on the progressive scale instead. To do so, you tick **box 2OP** on your income tax return (form no. 2042).[\[1\]](#source-1) Worth knowing: this option is global, it applies to **all** the investment income and capital gains in your household, not only the ones you'd choose.[\[1\]](#source-1)

The idea: your income tax part is no longer 12.8%, but the rate of your top tax bracket (your **TMI**, the marginal tax rate that applies to the last slice of your income). If your TMI is 0% or 11%, the scale can therefore beat the flat tax's 12.8%. If your TMI is high, it's the opposite.

Rule of thumb (not an official figure): the lower your bracket, the more attractive the scale becomes. But don't rely on a magic threshold. The right decision also depends on the scale's bonuses below and on the makeup of your household. The best move: test both in the simulator of your online tax return before confirming.

### The scale's bonuses: a 40% allowance and deductible CSG

If you opt for the scale, you unlock two advantages the flat tax denies you:

* A **40% allowance** on your dividends: only 60% of the amount is taxed.[\[2\]](#source-2)
* A **deductible portion of the CSG** (up to 6.8%) from your taxable income, which reduces the tax you'll pay the following year.[\[2\]](#source-2)

Neither of these bonuses exists under the flat tax.[\[2\]](#source-2) That's what makes the calculation less obvious than it looks: the 40% allowance on dividends can tip the balance toward the scale, even at a mid-range TMI. How much you save depends on your income, the nature of your gains (dividends or capital gains) and your family situation. No universal number here, you have to simulate your own case.

## The PEA: the wrapper to favour for investing in stocks

If you're starting out in the stock market, the best defence against the flat tax isn't juggling box 2OP: it's opening a **PEA** (Plan d'épargne en actions, a tax-advantaged equity savings plan). It's a wrapper designed for investing in European stocks with lighter taxation. We cover it in detail in our guide to [getting started investing in 2026 (ETFs and mistakes to avoid)](/en/blog/getting-started-investing-2026-etf-mistakes).

### Income tax exemption after 5 years

The PEA's big advantage: as long as you make no withdrawal for **5 years**, your portfolio grows completely free of income tax.[\[5\]](#source-5) And after 5 years, your withdrawals are **exempt from income tax**.[\[5\]](#source-5) You wipe out the 12.8% block of the flat tax entirely.

The only drawback: the social levies are still due, at the rate in force on the day of withdrawal, i.e. **18.6% in 2026**.[\[5\]](#source-5) On the PEA too, this rate went up this year (it was 17.2% until 2025). But on your gains, you go from 31.4% (brokerage account) to 18.6% (PEA after 5 years). The difference is enormous over the long run.

### The €150,000 ceiling and the rule on withdrawals before 5 years

A few limits to know:

* The contribution ceiling for the classic PEA is **€150,000** (€225,000 for the PEA-PME, with a combined cap of €225,000 per person).[\[5\]](#source-5) Plenty of room when you're starting out.
* Any **withdrawal before 5 years** in principle triggers the closure of the plan.[\[5\]](#source-5) There are exceptions (starting or taking over a business within 3 months, redundancy, disability, early retirement), but the basic rule stands: you lock it up for 5 years.[\[5\]](#source-5)

### PEA vs brokerage account: why start with the PEA

The brokerage account stays useful: no ceiling, access to US stocks, to ETFs from all over the world. But when you start with a small budget and a long horizon, the PEA ticks the right boxes: reduced taxation after 5 years, a ceiling that's more than enough, and a natural discipline (the money stays invested). The brokerage account becomes relevant once the PEA is well filled, or for assets it doesn't accept.

## Recap: how to decide between PFU, the scale and the PEA

1. **Open a PEA first** if you invest in European stocks or ETFs for the long term. After 5 years, you wipe out income tax, leaving only 18.6% in social levies.[\[5\]](#source-5)
2. **In a brokerage account, the 31.4% flat tax applies by default.**[\[1\]](#source-1) You don't have to do anything, it's automatic.
3. **If your TMI is low**, look at the income-tax-scale option (box 2OP) and its bonuses (40% allowance on dividends, deductible CSG).[\[2\]](#source-2) Simulate both before ticking it, because the option applies to your whole household.[\[1\]](#source-1)

## Key takeaways

- 2026 flat tax = 31.4% (no longer 30%, which was the old rate until 2025).
- The tax part (12.8%) hasn't moved; it's the social levy part that rose to 18.6%.
- The income-tax-scale option (box 2OP) applies to the whole household and unlocks the 40% allowance on dividends plus deductible CSG.
- The PEA wipes out income tax after 5 years; only 18.6% in social levies remains on the gains.
- Choosing between the flat tax and the scale is done case by case: simulate both in your tax return.

## FAQ

### What is the flat tax rate in 2026?

In 2026, the flat tax (prélèvement forfaitaire unique) on investment income and capital gains on securities is **31.4%**, made up of 12.8% income tax plus 18.6% social levies.[\[1\]](#source-1) The 30% rate you may have read corresponds to the old rate that applied until 2025.

### Why did the flat tax rise to 31.4%?

The increase comes from the social levies, which rose from 17.2% to 18.6% (+1.4 points) on 1 January 2026, following an increase in the CSG on capital income provided for by the 2026 social security financing law.[\[3\]](#source-3) The income tax part (12.8%) hasn't changed.[\[2\]](#source-2)

### Flat tax or the progressive scale: how to choose?

You can give up the flat tax and opt for the progressive scale by ticking box 2OP on your tax return.[\[1\]](#source-1) This option can be more advantageous if your top tax bracket is low, because the scale unlocks a 40% allowance on dividends and deductible CSG.[\[2\]](#source-2) The benefit depends on your income and your household: simulate both before deciding, because the option applies to the whole household.

### Is the PEA affected by the flat tax?

No, the PEA escapes the income tax part of the flat tax. After 5 years without a withdrawal, your withdrawals are exempt from income tax; only the social levies remain due, at 18.6% in 2026.[\[5\]](#source-5) That's what makes it the wrapper to favour for investing in stocks over the long term.

### Did the social levies on the PEA go up in 2026?

Yes. On the PEA as on other financial capital income, the social levies rose from 17.2% to 18.6% on 1 January 2026.[\[3\]](#source-3) After 5 years, you remain exempt from income tax, but these social levies apply at the rate in force on the day of withdrawal.[\[5\]](#source-5)

## Sources

1. [impots.gouv.fr, I hold securities, how are they taxed?](https://www.impots.gouv.fr/particulier/questions/jai-des-valeurs-mobilieres-comment-sont-elles-imposees), Direction générale des Finances publiques (DGFiP)
2. [impots.gouv.fr, Investment income](https://www.impots.gouv.fr/particulier/les-revenus-mobiliers), Direction générale des Finances publiques (DGFiP)
3. [Legifrance, Law No. 2025-1403 of 30 December 2025 on social security financing for 2026](https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000053226384), Legifrance / Journal officiel de la République française
4. [Service-Public Entreprendre, Change in the rate of the Prélèvement Forfaitaire Unique (PFU)](https://entreprendre.service-public.gouv.fr/actualites/A18796?lang=fr), Service-Public.gouv.fr (DILA)
5. [impots.gouv.fr, Life insurance and the PEA](https://www.impots.gouv.fr/particulier/lassurance-vie-et-le-pea-0), Direction générale des Finances publiques (DGFiP)