The year 2025 is fast approaching, and with it, a tax opportunity not to be missed. French taxpayers have until November 30, 2024 to take a crucial step in order to benefit from a significant tax reduction. This simple action could save you up to 12.8% in taxes on your investment income. Let's discover together the details of this measure and the steps to follow to benefit from it.
Understanding the tax benefit and eligibility conditions
The tax reduction in question concerns the single flat-rate levy (PFU)commonly called “flat tax”. This system, which normally amounts to 30% (12.8% income tax and 17.2% social security contributions), can be partially avoided under certain conditions.
To be eligible for this partial exemption in 2025, your reference tax income for 2023 must not exceed:
- €25,000 for a single person
- €50,000 for a couple subject to joint taxation
These thresholds are raised for income from dividends:
- €50,000 for a single person
- €75,000 for a couple
If you meet these conditions, you can potentially escape the “income tax” part of the PFUor 12.8%. A significant saving on your financial investments!
The crucial step to take before November 30
To benefit from this tax advantage, action is essential before the deadline of November 30, 2024. Here are the steps to follow:
- Contact your banking institution or financial
- Provide a sworn certificate indicating that your 2023 tax income is below the thresholds mentioned
- Respect scrupulously the deadline of November 30 for most investments (booklets, PEL, shares, bonds)
Please note that for life insurance and retirement savings plans (PER), you have until the time of receipt of income to make this request. Please note, without this step, the 12.8% levy will be automatically applied, even if you are eligible for the exemption.
Tax optimization: the importance of the 2OP box
The tax optimization strategy does not stop with the November 30 approach. During your 2025 income tax return, a specific box requires your attention: the case 2OP. By checking this box, you opt for the taxation of your investment income at progressive income tax scalerather than at the PFU.
This option can be particularly advantageous if you are tax-free or low-taxed. Here is a comparative table to illustrate the potential impact:
| Tax situation | With PFU (without 2OP box) | With scale (2OP box checked) |
|---|---|---|
| Not taxable | 12.8% tax | 0% tax |
| Low tax (11% bracket) | 12.8% tax | 11% tax |
Forgetting to check this box may result in a tax catch-upeven for non-taxable taxpayers. It is therefore crucial not to neglect this step when making your declaration.
Anticipate the tax changes of 2025
Although the precise details of the tax changes for 2025 will not be known until after the publication of the Finance Bill (by December 31, 2024 at the latest), it is wise to anticipate. There tax vigilance and promptness in your actions are the keys to optimizing your situation.
Remember that the tax landscape is constantly evolving. Personalities like Bruno Le MaireMinister of the Economy, or renowned tax experts like Nicolas Jacquotcan provide valuable insight into these developments. Stay tuned for official communications from Ministry of Finance to be informed of the latest tax news.
By taking the lead and taking these simple but crucial steps, you will ensure that you make the most of your tax situation for the year 2025. Don't miss this opportunity to reduce your tax burden and maximize your investment income. .
