Dividend Tax in France (2026): Flat Tax vs Income Tax Scale

Dividend tax in France: like any other income, dividends paid by a company (or passed on by your broker) to shareholders of a listed company are taxable in France. In this article we explain how this taxation works, the different ways dividends can be taxed and how to calculate dividend tax so that you can choose the best option for your situation and income.

How dividends are taxed in France in 2026

The way dividends are taxed in France changed in 2018. Shareholders and partners can choose either a 30% single flat-rate levy, known as the flat tax (prélèvement forfaitaire unique, PFU), or taxation under the progressive income tax scale, which depends on their income and household composition.

The flat tax (PFU) on dividends

This scheme, designed to simplify the payment of tax on dividends, was introduced in 2018 and applies to shares held in a standard securities account (compte-titres ordinaire, CTO).
The flat tax, or PFU, is a 30% levy on investment income, made up of 12.8% income tax and 17.2% social charges. No allowance applies, so the calculation is made on 100% of the dividend received.
With the flat tax, the progressive income tax scale is not applied to income received as dividends.
It may be more or less advantageous depending on your personal tax bracket. The shareholder alone decides how their investment income will be taxed.

To go further, also read our guides “SECHILIENNE SIDEC dividend” and “Vicat dividend”.

Taxation under the progressive income tax scale

The second way to pay tax on dividends is to opt for the progressive income tax scale, which can be cheaper than the PFU for taxpayers who pay little income tax.

This option gives you a 40% allowance on dividends and lets you deduct part of the CSG (6.8%).
The allowance only reduces income tax: social charges are still due on the full amount received.
This option applies to all your dividends and to your other savings income and capital gains for the year, so it is worth running a simulation that includes this other income.

Opting for the scale is therefore generally worthwhile only up to the 11% tax bracket. From the 30% bracket upwards, the flat tax is usually more advantageous because, even with the 40% allowance, the effective income tax rate on dividends would be 18%.

Which dividends qualify for the 40% allowance?

If you opt for the progressive income tax scale, some dividends paid by companies qualify for a flat 40% allowance. The conditions are:

The company paying the dividend must be subject to corporation tax (impôt sur les sociétés, IS), by law or by election, or to an equivalent tax if it is based outside France.
For foreign companies, those based in the European Union or in a country that has signed a tax treaty with France are eligible.
The allowance covers ordinary dividends voted at the annual general meeting as well as dividends voted at extraordinary meetings or distributions of reserves.
It also covers amounts paid when the company reduces its capital for reasons other than losses, for example a share buyback, a liquidation or a takeover.

Who pays dividend tax in France?

There are two types of taxpayers who owe tax on dividends, depending on their status with regard to the company that issued the shares.

Dividend tax for individual shareholders

Individuals who hold shares and receive dividends in proportion to the number of shares they own can choose between:

The flat tax: social charges plus a 12.8% non-final withholding (prélèvement forfaitaire non libératoire) deducted when the dividends are paid, which also becomes the final income tax if the flat tax applies.
The progressive income tax scale, applied the following year. In this case, tax is calculated on 60% of the amounts received, after the 40% allowance.

There is no double taxation: the withholding taken at payment is an advance to the French Treasury and is credited against the income tax due the following year.

Dividend tax for companies

If dividends are paid to a company subject to corporation tax, they are financial income that increases its taxable profit.

However, dividends received by parent companies are exempt from corporation tax under the parent-subsidiary regime, provided a flat 5% share of costs and charges is added back to taxable income. To qualify for this exemption:

The shares held must represent at least 5% of the subsidiary’s capital.
The shares must be held for at least two years.
The parent company must elect for the parent-subsidiary regime.

Which distributions are taxable?

Two types of company payouts are taxable: distributions and dividends decided by the company, and those that are not.

Dividends decided by the company are profits not placed in reserves and allocated to partners as dividends. They are voted at the annual ordinary general meeting. Dividend tax can apply to an SA (public limited company), an SAS or SASU (simplified joint-stock company), an SARL that has not opted for income tax, or an SNC (general partnership).
Distributions not decided by the company concern profits or income that were not placed in reserves or added to capital, as well as expenses incurred not in the company’s direct interest but in that of its managers or partners. These must be identified during a tax audit before being classed as distributions.

How to declare dividends on your French tax return

As part of our guide to trading taxation for beginners, let’s now look at how to declare the dividends you received on your tax return, depending on the taxation method chosen.

Declaring dividends under the flat tax

If you opted for the flat tax (PFU), you must:

Declare your dividends in box 2DC, on the line “Revenus des actions et parts” (income from shares).
Enter the total amount of dividends received, as reported by your broker.

By default, this amount is taxed at 30% in total, including social charges, regardless of your tax bracket.

Unlisted shares held in a PEA or PEA-PME

Do you need to declare dividends received in a PEA (plan d’épargne en actions) or a PEA-PME? In principle, no. However, for unlisted shares, if the dividends received exceed 10% of the acquisition value of the shares held the previous year, the portion above 10% is taxable. In that case:

Enter this amount in box 2FU of the return. This income is not subject to the 12.8% advance tax payment.
If the shares were bought or sold during the tax year, the acquisition value used is based on the average holding period.

Dividends to declare for social contributions (URSSAF)

Dividends exceeding 10% of the capital held that are paid to certain managers or partners of a company are also taxable and must be entered in box DSAA for the first declarant and box DSAB for the second.

The box is titled “Associé exerçant son activité dans une société IS : dividendes > 10% du capital social perçu par l’associé, son conjoint ou partenaire pacsé et ses enfants mineurs non émancipés” (partner working in a company subject to corporation tax: dividends above 10% of share capital received by the partner, their spouse or civil partner and their minor children).

Only the portion of income above 10% of the share capital must be entered in these boxes. This step is essential because the amounts in boxes 2CG, 2DC and 2TR are not enough to identify the part of the dividend above 10%.

Social security treatment of dividends for partners

Dividends subject to social contributions

Since January 2013, dividends received by a self-employed manager or partner (such as the majority manager of an SARL, the sole partner of an EURL or a partner in an SNC), or by their spouse, civil partner or minor child working in a company subject to corporation tax, are subject to social contributions for the portion exceeding 10% of the share capital, share premiums and current-account contributions held by that person.

The 10% threshold applies to the total of the share capital, share premiums and current-account contributions belonging to the self-employed person, not to the company’s entire capital.
Sole traders with limited liability (EIRL) who have opted for corporation tax must also include in their business income the portion of dividends exceeding 10% of the value of the allocated assets, or 10% of the profit if that amount is higher.

Dividends not subject to social contributions

Some dividends are not subject to social contributions, in particular:

Dividends paid to managers covered by the general employee scheme, such as minority managers of an SARL or presidents of an SAS or SA.
Dividends received by partners who do not work in the company.
The portion of dividends not subject to social contributions received by majority managers of an SARL/EURL, sole partners of an EURL or partners of an SNC who work in the company.

Conclusion: what is the best way to have your dividends taxed in 2026?

If you are a private shareholder and still unsure how to declare your dividends and which tax method to choose, run a simple calculation using the information in this article to pick the most advantageous option. As a general rule, for the lowest tax brackets the flat tax is less attractive and means paying more tax. From the 30% bracket upwards, however, the flat tax makes sense and lets you pay less tax on dividends than on the rest of your household income.
Looking for a reliable broker to buy shares and receive dividends? Feel free to ask us for advice in the comments!

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