France: Proposed taxation on Livret A savings accounts

The French Court of Auditors has proposed a reform to the taxation of household wealth, which could include taxing interest earned on popular savings products such as the Livret A, LEP, LDDS, and Livret Jeune. Currently, these accounts benefit from total exemption from income tax and social levies, a status that resulted in an estimated €5 billion loss in state revenue during 2025.

The proposal suggests taxing only the interest earned on amounts exceeding specific regulatory ceilings. For the Livret A, this threshold would be set at €22,950.

Under current fiscal rules, a taxable savings account must offer a gross annual rate higher than the Livret A's 1.70% net rate to remain competitive. For savers subject to the Single Flat Tax (PFU) of 31.4%, a gross rate exceeding 2.48% would be required to match the Livret A's current net return. The necessary gross rate varies for those opting for progressive income tax scales, ranging from 2.09% for the lowest tax bracket to over 4.21% for higher earners.