French tax rates for high net worth individuals lowered

The French finance bill for 2019 adjusted the general 30% flat tax on financial incomes, the real estate wealth tax and the business transmission tax regime for high net worth individuals in a bid to keep more wealthy French at home. Benoît Couty, partner at Pichard & Associés, examines the changes

The 30% flat taxation of financial incomes (flat tax) is the most significant tax measure that was adopted in 2018 after President Emmanuel Macron’s election in an effort to stop French high net wealth individuals (HNWI) relocating outside France.

The 30% flat tax consists of 12.8% income tax and 17.2% social contributions, which is much lower than the general bracket rates applicable otherwise (up to 45% on incomes exceeding €156,000 (£135,000) plus 17.2% social contributions).

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