A threshold of €150,000 and a rate of 7.5% for %: does a Luxembourg contract count?

Yes. The reduced rate of 7.5% (%) applies only up to a limit of €150,000 in premiums paid. This threshold is personal and is calculated across all your contracts, regardless of the insurer's location. A Luxembourg contract is therefore included with your French contracts. Above this threshold, only a portion of the proceeds remains at 7.5% (%); the other portion is taxed at 12.8% (%).

What the threshold measures

For premiums paid since 27/09/2017, the redemption is taxed as follows:

The €150,000 threshold applies to contracts of 8 years or more. The unit of measurement is the premium paid. The BOFiP (French Official Tax Bulletin) states: "a threshold set at €150,000 in premiums paid.".

Premiums paid up to September 26, 2017, are subject to a different tax regime: either a standard tax scale or a flat-rate withholding tax (optional) of 35%, 15%, or 7.5% depending on the contract's age. However, these premiums are included when assessing the threshold: the BOFiP (French Official Tax Bulletin) considers all premiums paid (paragraph 160). Premiums paid before September 27, 2017, also reduce the portion of the proceeds taxed to 7.5% (paragraph 190).

A personal threshold, on all contracts

The BOFiP states it clearly: "this is a personal threshold." Two consequences.

It is assessed across all of your contracts. The threshold is calculated across all of the taxpayer's contracts, regardless of the insurer's location. French contracts, Luxembourg contracts, and other European contracts all count towards the same threshold. A contract with €100,000 in premiums with one insurer and another with €100,000 with a second insurer together contribute €200,000 towards the threshold, not two separate €100,000 contracts.

It is not shared with the spouse. Your contract premiums are not added to those of your spouse. A jointly held contract is a special case: its premiums count for each of the joint policyholders. For married couples or civil partners who are joint policyholders, the BOFiP (French Official Tax Bulletin) allows each of them to be credited with half of the total premiums paid (paragraph 170).

On what date are the bonuses calculated?

The premiums taken into account are those which have not been reimbursed in capital by December 31 of the year preceding the event giving rise to taxation of the products.

Remember two points:

• A premium that has already been repaid in capital no longer counts; ;
• The reference date is December 31 of the previous year, not the day of the redemption.

For a redemption mandated in 2026, the reference date is therefore 31/12/2025.

The condition that depends on the insurer

The 7.5% % rate assumes an insurer established in France or another EU member state. For another EEA state, an administrative assistance agreement is required. Luxembourg is an EU member state. A Luxembourg insurer therefore meets this requirement. The BOFiP (French Official Tax Bulletin) does not specifically mention Luxembourg; this is simply the application of its general rule.

Another useful point: the annual allowance of €4,600 (single person) or €9,200 (married or civil union couple filing jointly) also applies to insurers in the European Union or the EEA, under the same conditions as for a French contract. It is calculated globally across all contracts and applies to contracts of 8 years or more.

What happens beyond the threshold

Above €150,000 in premiums, the 7.5% % rate applies only to a portion of the proceeds. The remaining portion is taxed at 12.8% %. The method for determining these portions is outlined in BOFiP RPPM-RCM-20-15 (specifically paragraph 190). This page does not provide further details.

Numerical example (fictitious profile)

Situation. A fictitious single person opened a Luxembourg contract in November 2017 and paid €100,000 in premiums. They opened a French contract in January 2018 and paid €100,000 into it. No capital withdrawals were made. In October 2026, they redeemed part of the Luxembourg contract. The proceeds included in this redemption amounted to €30,000. Both contracts were over 8 years old.

Issue. She reasons contract by contract: €100,000 with each insurer, therefore under €150,000 each time. She anticipates 7.5 % on all products.

Strategy. Add up the premiums of all contracts as of 31/12/2025, regardless of the insurer, then compare the total to €150,000.

Result. Total premiums as of December 31, 2025: €200,000. The threshold is exceeded by €50,000. Therefore, not everything can be taxed at 7.5% of the % rate. On €30,000 of proceeds, before allowances and excluding social security contributions, the tax liability is between €2,250 (all at 7.5% of the % rate) and €3,840 (all at 12.8% of the % rate), representing a maximum difference of €1,590. The exact amount depends on the allocation of proceeds between the two rates, as stipulated by the BOFiP (French Official Tax Bulletin).

CALCULATION: 100,000 + 100,000 = 200,000; 200,000 − 150,000 = 50,000; 30,000 × 7.5 % = 2,250; 30,000 × 12.8 % = 3,840; 3,840 − 2,250 = 1,590. The premium amounts, the contract dates, and the €30,000 in products are assumptions of the fictitious profile.

What changes depending on your situation

• The number of contracts. Everyone counts, at every insurer.
• The date of your bonuses. Before or since 27/09/2017: two regimes, and an effect on the fraction imposed at 7.5 %.
• Capital repayments. A premium that has already been repaid no longer counts as of December 31st.
• Joint subscription. A contract with two subscribers counts for each; for spouses or civil partners, half of the premiums can be retained for each.
• The age of each contract. The rate of 7.5 % assumes 8 years.

These points are examined on a case-by-case basis. No tax outcome is guaranteed in advance.