In France, gains and income from traditional financial investments such as stocks, bonds, ETFs, funds, derivatives, and other securities are subject to specific tax rules under the Prélèvement Forfaitaire Unique (PFU) regime.
In this article, you'll find out which transactions are taxable, how gains are calculated, and other important details.
ℹ️ Also investing in crypto?
If you also hold crypto-assets, the tax rules that apply are different. Please refer to the dedicated France Tax Guide for crypto-assets.
Capital gains tax
When you sell or dispose of traditional financial assets, such as stocks, bonds, ETFs or funds, you may be liable to pay tax on any capital gains realized.
Disposals that trigger a capital gain or loss
The following are common types of transactions that trigger capital gains calculation in France:
selling, closing a position on stocks, bonds, ETFs, mutual funds, or other securities
derivatives, closing a position on futures, options, CFDs (Contracts for Difference), or warrants
Disposals that don't trigger a capital gain or loss
The following are common types of transactions that do not trigger capital gains calculation in France:
internal transfers, moving assets between your own accounts with the same broker
distributions received, receiving dividends or bond coupons (these are treated as income, not capital gains)
Capital gains tax rate
Individual investors in France are subject to a flat levy known as the Prélèvement Forfaitaire Unique (PFU) at a rate of 30%. This consists of 12.8% income tax and 17.2% social security contributions.
ℹ️ Progressive tax scale option You may opt for taxation at the progressive income tax scale instead of the PFU flat rate, by checking box 2OP on your tax return. This can be advantageous if your total income falls in a lower tax bracket, and also makes you eligible for a 40% allowance on dividends declared in box 2DC.
How capital gains are calculated
Capital gain or loss is calculated as follows:
Capital Gain = Sale Proceeds (net of fees) – Acquisition Cost (PMP method)
For traditional financial assets, the acquisition cost is determined using the PMP method (Prix Moyen Pondéré, or Weighted Average Purchase Price). This means the cost basis of each asset sold is the weighted average of all purchase prices for that same asset, including buying fees.
PMP formula
PMP = Total amount paid for all units held / Total number of units held
The PMP method is applied per asset and per broker: only the purchase history of the specific asset being sold is taken into account, not the entire portfolio.
Fees
All fees directly related to buying and selling are included in the calculation:
buying fees are added to the acquisition cost (field 522 in Form 2074)
selling fees are deducted from the gross sale proceeds (field 517 in Form 2074)
Capital loss offset
Capital losses from traditional financial assets can be offset against capital gains of the same nature realised in the same fiscal year. If losses exceed gains for the year, the net loss can be carried forward for up to 10 years to offset future gains of the same type.
⚠️ Losses from previous years If you have unused losses from prior tax years, you can apply them against current gains using box 3VN of Form 2042-C. Finbooks does not have access to your historical tax filings, so this value must be entered manually based on your prior declarations.
Investment income: dividends and bond coupons
Not all financial income is a capital gain. Dividends and bond coupons are treated as investment income and must be declared separately from capital gains.
dividends from companies located in France, the EU, or countries with a Double Taxation Agreement are declared in box 2DC of Form 2042
interest and fixed-income proceeds (bond coupons, government bonds, taxable savings) are declared in box 2TR of Form 2042
Both types of income are subject to the PFU at 30%, or to the progressive tax scale if you opt for it.
Where to report your investments
Gains, losses, and income from traditional financial investments are filed as part of the French annual income tax return. The main forms to use are:
formulaire 2042 and 2042-C: the main tax return, where you report net capital gains (box 3VG), net losses (box 3VH), dividends (box 2DC), and interest income (box 2TR)
formulaire 2074: an appendix used to detail individual sales and calculate gains/losses transaction by transaction. This is mandatory if you trade derivatives or calculate your gains independently from a French bank or broker
formulaire 3916: to declare each financial account (brokerage, bank, or investment platform) held outside France
To learn more about how to fill out these forms step by step, please refer to the dedicated article on the France Tax Return for traditional financial assets.
Tax and declaration deadlines
The French fiscal year runs from 01 January to 31 December. The deadline for filing your tax return depends on your department (region):
Department | Deadline |
Paper declaration | 20 May 2025 |
1 to 19 (and non-residents) | 22 May 2025 |
20 to 54 | 28 May 2025 |
55 to 974/976 | 05 June 2025 |