France deputies debate potential increase to capital gains flat tax

French deputies are debating amendments to the Social Security financing bill that could significantly increase the tax burden on capital income. Following a rise in social levies on January 1, 2026, which brought the flat tax to 31.4%, new proposals aim to further hike these rates by 2027.

One proposal from La France insoumise suggests increasing the General Social Contribution (CSG) on capital income by 1.4 points, which would raise the total flat tax to 32.8%. This measure is estimated to generate an additional 2.6 billion euros for Social Security. A more aggressive amendment from Communist deputies proposes raising the CSG on capital income to 19.6%, potentially pushing the total flat tax to 41.4%. In exchange, they suggest reducing the CSG on labor income for individuals earning up to 2,037.50 euros per month.

In the context of existing savings vehicles, the Plan d’épargne en actions (PEA) remains a tax-efficient option for stock market investment. Since January 1, 2026, social levies on gains from PEA accounts held for over five years have risen to 18.6%, up from 17.2% in 2025. Despite these increases, the PEA continues to offer a lower tax rate compared to standard securities accounts, which face a 31.4% tax rate on gains.