France’s newly enacted 2026 Finance Law, promulgated on 20 February and detailed on 24 February by wealth-advisory site Capitheos, raises the prélèvement forfaitaire unique—better known as the ‘flat tax’—from 30 percent to 31.4 percent. The increase stems from a 1.4-point rise in social-contribution charges (CSG) on capital income, which jump from 17.2 % to 18.6 %.
The higher rate applies to dividends, bond coupons, capital-gains on securities and cryptocurrency disposals, as well as certain pension-exit payments (PER). Insurance-life products and real-estate gains retain the old 17.2 % social-levy, but expatriates and cross-border commuters with equity compensation or portfolio income will see an immediate hike in withholding.
Amid these fiscal adjustments, securing the correct immigration status is just as vital; VisaHQ’s France portal (https://www.visahq.com/france/) streamlines visa applications and residency-permit renewals for assignees and their families, allowing HR teams to handle travel paperwork efficiently while tax advisers focus on the new withholding mechanics.
![2026 Finance Law Raises France’s Flat Tax to 31.4 %, Impacting Expatriates and Mobile Employees]()
For globally mobile staff seconded to France, the timing is critical. Companies operating tax-equalisation programmes must revise hypothetical tax calculations, gross-up allowances and shadow-payroll instructions or risk under-withholding. International assignment contracts referencing a 30 % flat tax should be amended, and stock-plan administrators ought to update net-settlement algorithms before Q2 vesting cycles.
Personal financial planning also changes: high-income foreigners who previously chose the flat tax over progressive rates will need to rerun simulations, especially if they hold sizeable dividend-paying portfolios. Non-residents with French income should note that the withholding tax on dividends (currently 12.8 % + social surtax where applicable) remains unchanged, but the social component payable by residents rises.
Beyond the flat-tax headline, the Finance Law fine-tunes PER exit rules, clarifies furnished-rental (LMNP) thresholds, and introduces a new contribution on certain private holding companies—issues that private-banking advisers say may alter the attractiveness of France for senior executives relocating from lower-tax jurisdictions.
The higher rate applies to dividends, bond coupons, capital-gains on securities and cryptocurrency disposals, as well as certain pension-exit payments (PER). Insurance-life products and real-estate gains retain the old 17.2 % social-levy, but expatriates and cross-border commuters with equity compensation or portfolio income will see an immediate hike in withholding.
Amid these fiscal adjustments, securing the correct immigration status is just as vital; VisaHQ’s France portal (https://www.visahq.com/france/) streamlines visa applications and residency-permit renewals for assignees and their families, allowing HR teams to handle travel paperwork efficiently while tax advisers focus on the new withholding mechanics.
For globally mobile staff seconded to France, the timing is critical. Companies operating tax-equalisation programmes must revise hypothetical tax calculations, gross-up allowances and shadow-payroll instructions or risk under-withholding. International assignment contracts referencing a 30 % flat tax should be amended, and stock-plan administrators ought to update net-settlement algorithms before Q2 vesting cycles.
Personal financial planning also changes: high-income foreigners who previously chose the flat tax over progressive rates will need to rerun simulations, especially if they hold sizeable dividend-paying portfolios. Non-residents with French income should note that the withholding tax on dividends (currently 12.8 % + social surtax where applicable) remains unchanged, but the social component payable by residents rises.
Beyond the flat-tax headline, the Finance Law fine-tunes PER exit rules, clarifies furnished-rental (LMNP) thresholds, and introduces a new contribution on certain private holding companies—issues that private-banking advisers say may alter the attractiveness of France for senior executives relocating from lower-tax jurisdictions.
