PARIS: French residents no longer have to pay a wealth tax on savings and investment income, after sweeping tax reforms came into effect limiting it to real estate. In September 2017, the French Government announced that a number of tax reforms, including significant tax cuts for investment assets and income, would come into effect on 1 January 2018.The most significant change is to wealth tax, where the scope has been limited to real estate assets.Under the reform, the previous threshold of €1.3m (£1.15m, $1.5m) stays in place and the rates of wealth tax remain the same as before.The 75% limit also remains in place.Another key change is the tax on investment income, which is now no longer subject to income tax scale rates.
According to tax and wealth management firm Blevins Franks, investment income is now liable to a fixed income rate of 30%, regardless of the amount earned. This 30% flat rate includes both the income tax and the social charges so the income tax part is equal to 12.8%,” the firm said. All income in France is subject to social charges, as well as income tax.The new flat rate applies to investments that are more than €150,000 per individual.Households in low-income brackets will keep the option for progressive income tax rates.