Dividends or capital gains on disposal: flat tax rate of 31.4% (%) or progressive tax scale in 2026

In 2026, dividends and capital gains from the sale of securities are taxed by default at the flat tax rate (PFU) of 31.4%. This rate combines 12.8% income tax and 18.6% social security contributions. You can opt for the progressive tax scale, an annual and comprehensive option. The 40% allowance applies only to dividends, and only with the progressive tax scale option.

The rates to remember in 2026

The flat tax rate applies automatically. Simply leave all boxes unchecked. For capital gains from the sale of securities realized since January 1, 2018, this is the default tax method.

For example, a capital gain of €400,000 is subject to €125,600 in flat tax: €51,200 in income tax and €74,400 in social security contributions.

What changed on January 1, 2026

The total social security contributions on dividends, capital gains from the sale of securities, and other relevant income will increase from 17.2% to 18.6%. This is due to the rise in the CSG (General Social Contribution), which was increased from 9.2% to 10.6% by the 2026 Social Security Financing Law (Law No. 2025-1403 of December 30, 2025). For investment income, the increase will take effect on January 1, 2026.

Not all income is affected. According to the tax administration's brochure, rental income, capital gains on real estate, life insurance, and home savings plans remain subject to a CSG (General Social Contribution) of 9.2%, totaling 17.2%. The page on "Investment Income" also lists, among the products still subject to 17.2%, certain home savings plans (CEL and PEL) and popular savings plans (PEP) as exempt. The two pages do not describe these exceptions in the same way. For a specific product, the rate must be verified on a case-by-case basis.

Income from 2025 that was not subject to social security contributions at the time of receipt is subject to them, at a rate of 18.6 %, on the 2026 tax notice.

The total PFU therefore goes from 12.8 % + 17.2 % to 12.8 % + 18.6 %, i.e. 31.4 %.

The option for the progressive scale

You can opt out of the flat tax and choose the progressive income tax scale. This is a comprehensive option: it is checked in box 2OP and applies to investment income such as capital gains.

The texts we have read do not say the same thing about the possibility of going back on this option after ticking it: the rules that govern a change of mind are not dealt with here and can be checked on the instructions for the declaration of the year.

For dividends: the 40 % allowance

With the tax bracket option, eligible dividends benefit from a 40% allowance on their gross amount. Without this option, this allowance does not apply.

Three points to clarify:

• The allowance reduces the income tax base. It does not reduce social security contributions.
• It does not cover all payments. Attendance fees, for example, are excluded.
• It assumes the overall option. It cannot be chosen alone.

For capital gains: no 40% allowance %

The 40 % allowance applies specifically to dividends. It does not apply to capital gains from the sale of securities.

Another allowance exists for capital gains: the holding period allowance. It applies only if the gains are taxed according to the progressive income tax scale. It is reserved for securities acquired or subscribed to before January 1, 2018, with some exceptions. For securities acquired since that date, it does not apply. Its details depend on the acquisition date and the type of securities. It is not discussed here.

Some transferors are subject to specific regimes. These depend on their individual circumstances and are not addressed on this page.

Three questions before checking box 2OP

The option is comprehensive. Therefore, it cannot be decided on a title-by-title basis. Three questions guide the choice:

1. What is your marginal tax rate? He is the one who decides, for dividends, the benefit of the 40 % allowance.
2. Have you made any capital gains this year? They follow the option, without benefiting from the 40 % discount.
3. Were your securities acquired before January 1, 2018? If so, the allowance for length of ownership can be included in the calculation.

Changing your mind after making the choice is subject to rules that are not covered here: check them in the declaration instructions.

Flat-rate tax or tax bracket: the comparison threshold

For a dividend, the comparison focuses on income tax. Social security contributions of 18.6% are due in both cases.

With this option, 60% of the dividend remains taxable after the 40% allowance. The progressive tax scale is therefore less expensive than the flat tax rate when the marginal tax rate is less than 12.8% / 60%, or approximately 21.3%, before taking into account the deductible social security contribution. Above this threshold, the flat tax rate is lower for income tax.

This rule isolates income tax. It leaves out the deductible CSG (6.8 %, unchanged in 2026) and other parameters of your tax return.

Dividends and social security contributions: the 10% capital threshold

For self-employed workers, an additional rule applies to taxation. The URSSAF simulator cites majority shareholders of SARLs, sole shareholders of EURLs, and partners in SNCs. For them, the portion of dividends exceeding 10% of the share capital is subject to social security contributions.

An example of how to read it: for a share capital of €50,000, the threshold is €5,000. On a dividend of €40,000, the portion exceeding the threshold is €35,000.

The simulator does not mention the shareholder current account. The detailed calculation depends on your status and structure. It is verified on a case-by-case basis.

Numerical example (fictitious profile)

Situation. A managing partner receives €100,000 in gross dividends in 2026. His marginal tax rate is 30 % (hypothetical profile assumption).

Issue. Should he let the flat-rate tax (PFU) apply or select the global option for the tax scale?

Strategy. The firm compares the two methods of taxation before payment. It takes into account the executive's marginal tax rate, their other investment income, and any capital gains for the year, since the option is comprehensive.

Result.

For this profile, the flat tax rate (PFU) costs €5,200 less than the standard tax brackets, before taking into account the deductible social security contribution (CSG). With the option for the standard tax brackets, the deductible CSG (6.8% of taxable income) reduces taxable income: the actual difference is therefore less than €5,200. Excluding the deductible CSG, with a marginal tax rate below 21.3% of taxable income, the comparison would be reversed.

The table does not take into account the deductible CSG.

This profile is fictitious. The figures illustrate the calculation. They do not predict your situation.

What changes depending on your situation

• Your marginal tax rate.
• Your other investment income and capital gains for the year.
• The date of acquisition of your securities.
• Your status as a manager and the company's share capital.
• The product in question, some of which are treated separately.

La règle dépend de votre situation. Aucun résultat n’est promis.