The following information is based on French tax rules applicable in 2014. We recommend that you consult your financial intermediary or the competent tax authorities for confirmation.
Tax on dividends (except for PEA)
Dividends received by shareholders who are French tax residents, are taxable on a sliding scale basis.
For individuals resident in France for tax purposes, personal income tax on dividends distributed by French companies liable to corporate income tax or foreign companies registered in countries with which France has a tax treaty liable to corporate income tax, is due after applying a 40% tax-free allowance.
Yet, dividends received in 2013 are liable to a mandatory levy of 21% that corresponds to a personal income tax advance. It is calculated on the gross amount of income, before any allowance or deduction. If this advance exceeds the income tax due, it will be paid back to the taxpayer. Taxpayers whose income in the penultimate year was lower than €50,000 (for single, widowed or divorced people and married couples taxed separately) or €75,000 (for married couples or couples in a civil union who are taxed jointly) can ask for an exemption of this levy.
They will have to send a request to their financial intermediary no later than November 30 of a year to benefit from the exemption the following year.
Dividend income is also liable to social contributions at a rate of 15.5%, (CSG, CRDS, social contributions…) calculated on the gross amount of income, before any allowance or deduction. CSG is deductible to the extent of 5.1% of total taxable income in the year of payment.
Good to know - For fully registered shareholders
Fully registered shareholders will have to ask BNP Paribas Securities Services for an exemption form that they will have to send back no later than November 30, 2014 to benefit from the exemption in 2015.
Capital gains tax on disposals of shares (except for PEA)
Capital gains on disposals of shares realized in 2013, after applying tax relief based on the period of ownership, are taxable on the sliding scale basis. The tax relief applying on the net amount of capital gains is:
- 50% of the amount for an ownership of 2 years and more
- 65% of the amount for an ownership of 8 years and more
The period of ownership starts on the shares’ day of acquisition.
Capital losses on disposals of shares can be offset against capital gains of the same type made in the year of disposal or during the subsequent 10 years.
The tax relief based on the period of ownership also applies to capital losses.
Capital gains on disposals of shares are also liable to social contributions at a rate of 15.5%, (CSG, CRDS, social contributions…) calculated on the net amount of income. CSG is deductible to the extent of 5.1% of total taxable income in the year of payment.
Tax regime for “PEA” share savings plans
The French “PEA” share savings plan offers better tax planning opportunities than an ordinary securities account, because it enables investors to hold shares in companies liable to corporate income tax while enjoying exemption from tax on dividends and capital gains, provided that no withdrawal is made during a certain period of time.
PEA - exemption from tax on dividends and capital gains
|Withdrawal||Tax rate on dividends and capital gains||Social contributions|
|Before 2 years||22.5%||15.5%|
|Between 2 and 5 years||19%||15.5%|
|After 5 years||Total exemption||15.5%|
The amount of cash that can be paid into the plan is capped at €132,000 (€264,000 for a couple). From January 1, 2014, it is capped at €150,000 (€300,000 for a couple). In the event of partial or full withdrawal within the initial 8-year period the savings plan will be cancelled.
French wealth tax (Impôt de Solidarité sur la Fortune – ISF)
For ISF calculation tax purposes, a taxpayer has to declare the value of the shares he is holding.
To calculate the value of his Sanofi shares he can elect to report in his/her tax return:
- the last known share price before January 1 of the tax year: €77.12 on December 31, 2013
- or the average of the last 30 closing prices: €75.88 for 2013.