Owners of a super bank account, shares, bonds or even building savings (PEL) opened from 2018 will not miss PFU, a one-off flat-rate deduction from income from these investments. AND flat tax of 30%, consisting of 12.8% flat rate tax and 17.2% social security contributions, which applies to your interest and dividends.
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With a PFU, you are taxed at source at 30% when interest or dividends are paid to you, usually at the end of the year. If the part “social posts” 17.2% is unavoidable, but you may be exempt from depositing or paying (if you are not taxable) part “taxes” in the amount of 12.8% for your interest paid in 2024. To do this, a prepayment waiver request must be mailed in by the end of the month, i.e. no later than November 30, 2023.
The letter in question must be sent to all financial institutions where you hold products likely to fall under PFU, such as the bank where you hold the super booklet or PEL, or brokers or “broker” which allows you to invest in stocks or bonds. If the establishment has not specified a date in your contract when this document must be sent to them, it must be received by November 30th inclusive for it to be valid. So you shouldn’t delay!
Conditions to be met in order to avail of the deposit exemption
In order to benefit from the prepayment exemption on interest or dividends paid in 2024, you must honestly declare that your income does not exceed a certain ceiling: for interest (bank books, PEL, etc.) your tax income reference number will be displayed. on your 2023 tax assessment must not exceed €25,000 for single persons and €50,000 for households subject to joint taxation. Regarding the exemption from advance payment on dividends (shares), your taxable income cannot exceed 50,000 euros for a single person and 75,000 euros for households subject to joint taxation.
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If you meet these conditions and the mail is sent on time, the benefit is double. If you are subject to tax, you will not have to pay at source on income paid to you in 2024. You will pay it much later, at settlement time, after your income received in 2024 is declared, i.e. in the summer of 2025. For non-taxable households, it is the advantage is even greater, because this letter allows you to completely escape the 12.8% tax, which does not apply to you. More specifically, you won’t have to wait for a tax refund, probably in 2025, on your 2024 income that you would have paid in 2024 without the advance exemption! Therefore, in both cases, whether taxable or non-taxable, you will only be charged social security contributions of 17.2% at source.
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