Taxation of your shares

The information below briefly describes the French tax rules in effect at 1 January 2015 concerning income and capital gains and losses on disposals of securities carried out by taxpayers (individuals) during 2014, who are French tax residents. The tax system is described for information only and may be subject to regulatory and legal changes that occur after publication of this guide. For any information specific to your situation, please consult with your regular advisor or your tax office concerning the tax treatment of your share ownership. If your personal circumstances may allow you to benefit from certain tax exemptions or reductions, if you are subject to taxation in countries in addition to France, and/or if your citizenship gives rise to tax obligations in other countries (for example, a U.S. citizen residing in France), you must check the specific rules that apply to your situation.

Taxation of dividends

Dividends received in 2014 by French tax residents are subject to a withholding tax of 21% on the gross amount of distributed dividends. This withholding is deducted at source by the dividend paying institution in France (SGSS), and is paid on the 15th of the month following receipt of the income. This mandatory withholding at source does not discharge payment of income tax, and constitutes an advance income tax payment offset against income tax owed for the following year. However, individuals included in a tax residence whose reference taxable income in the penultimate year preceding the receipt of dividends was less than €50,000 for a single person, or €75,000 for persons taxed jointly, can request an exemption from this advance payment. Persons eligible for an exemption from the mandatory advance payment shall submit a sworn declaration to SGSS before 30 November of the year preceding the receipt of income (for example, before 30 November 2015 for income to be received in 2016) which states that their reference taxable income set forth in the tax notice prepared for income from the penultimate year preceding the payment is less than €50,000 or €75,000, whichever is applicable (for an exemption from advance payment on 2016 income, use the reference taxable income for 2014). Dividends received in 2014 by a French tax resident are subject to a sliding income tax scale, after application of 40% tax relief under certain conditions, and are taxed in the year following the receipt of dividends on the amount net of such tax relief, after deduction of any costs. The 21% mandatory withholding is offset against the income tax. If the withholding exceeds the amount owed, the excess payment will be returned. Dividends received in 2014 by a French tax resident are subject to additional social security contributions at a rate of 15.5% deducted at source, concurrent with the 21% withholding by the French dividend-paying institution.

Taxation of capital gains

Capital gains on securities disposed of by individuals in 2014 are taxed on a sliding income tax scale and are subject to additional social security contributions at a rate of 15.5%. Tax relief based on the length of time the shares have been held is used to determine the income tax for disposals carried out since 1 January 2013 according to the table below (1).

Any capital losses on disposals may be offset against capital gains of the same kind realised in the year the disposal took place or during the subsequent ten years (2).
(1) This tax relief does not apply to social security contributions.
(2) Note that, according to the tax administration, tax relief based on length of ownership also applies to capital losses.


Shares held in a share savings plan (PEA)

Under certain conditions which you should review with your bank, the PEA may offer the right to an exemption from income tax and social security contributions on any net income and net capital gains generated by investments in the PEA, provided that the income and capital gains concerned remain inside the PEA. On closure of the PEA (where this occurs more than five years after the date the PEA was opened) or when a partial withdrawal is made (where this occurs more than eight years after the date the PEA was opened), there is an exemption from income tax on the net gain realised since the plan was opened. However, this gain remains subject to social security contributions when the plan closes.

Exceptional contribution on high income

An exceptional contribution of 3% to 4%, based on the tax household’s reference taxable income (specifically including dividends and capital gains on disposals of shares) is owed when the reference taxable income exceeds the €250,000 threshold for single, widowed, separated or divorced taxpayers, or €500,000 for taxpayers who are married or in a civil union (PACS) who are taxed jointly. This contribution is in addition to the income tax.

Wealth tax (ISF)

You are subject to the ISF if your net taxable assets exceed the €1,300,000 threshold as of 1 January  2015. The threshold is assessed by tax household within the meaning of the ISF tax household concept. The value of your stock portfolio is taken into account when calculating the assets subject to the ISF. You may elect one of two valuation methods for listed shares, as proposed by the General Tax Code and the French tax administration: the last known share price at 31 December 2014, appearing on the statement prepared by the establishment where the account is held (€25.30), or the average closing price over the last thirty trading days in 2014 (€24.64). As of 1 January 2015, the ISF scale ranges from 0.5% to a maximum of 1.5%. Under certain conditions, if you are Carrefour group employee or corporate officer, the taxable value of your shares may be reduced. You must review the conditions you must meet to benefit from these reductions.

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