• No contribution cap, no fund restrictions.
• 31.4% flat tax (PFU) on gains and dividends.
• Use for assets that cannot go in the PEA.
• Available at international brokers (IBKR, DEGIRO).
• Prefer accumulating ETFs to defer tax events.

Lower-income investors can elect to use the progressive income tax scale instead of the flat 12.8% component. The 18.6% social charges still apply either way. The election covers all investment income for the year — you cannot mix rates.

Choosing the progressive scale unlocks two additional benefits: a 40% tax rebate on eligible dividends before they enter your taxable income, and partial CSG deductibility (a portion of social charges paid becomes deductible from the following year’s taxable income). These matter for investors receiving significant dividend income below the top marginal bracket.

Capital losses in a CTO can be offset against gains in the same year. Unused losses carry forward for up to ten years. Losses inside a PEA cannot be used to offset CTO gains — the two accounts are treated separately.

Withholding prepayment exemption: Investors whose reference tax income is below €50,000 (single) or €75,000 (couple) for the prior year can apply to be exempt from the automatic 12.8% prepayment on dividends, improving cash flow during the year.

Any withdrawal before 5 years normally triggers the full 31.4% rate and used to close the account automatically (this closure rule was removed in 2019 — partial withdrawals no longer force closure regardless of timing, but the full tax rate still applies).

French law allows early withdrawal without the additional penalty in specific cases: creating or taking over a business, involuntary unemployment lasting more than three months, disability (second or third category), and early retirement. Outside these, the full 31.4% applies.

• 31.4% PFU on all capital gains and dividends.
• Dividends trigger a taxable event in the year received — even if reinvested.
• No tax deferral inside the account.
• Prefer accumulating ETFs to defer the tax event to the point of sale.

Assurance-vie is a life insurance contract that holds investments. It is not a straightforward brokerage account. You contribute to the contract, which can hold two types of assets:

• Fonds euro: a capital-guaranteed fund managed by the insurer, typically invested in bonds. Returns are low but principal is secure. For investors who want some bond exposure without the 31.4% CTO tax on bond ETF income.
• Unités de compte (UC): unit-linked funds including ETF-like products. Returns are not guaranteed. This is where you access equity market growth inside the wrapper.

• UC funds inside assurance-vie carry higher ongoing costs than buying UCITS ETFs directly — management layers add up.
• ETF selection inside contracts is more limited than a CTO or PEA.
• The PEA offers a better tax rate (18.6% after 5 years vs 7.5% + 18.6% = 26.1% after 8 years in AV for gains above the annual allowance).
• Complexity: assurance-vie contracts vary significantly by provider and fee structure.

• Direct real estate holdings (residential, commercial, land)
• Real estate held through property companies (SCIs)
• REITs and real estate investment funds above certain thresholds

• No new contributions once you become a non-resident. The account can stay open and assets can be held, but the contribution cap becomes irrelevant — you cannot add to it.
• The French income tax exemption after 5 years only applies while you are a French tax resident. Your new country of residence will apply its own tax rules to any withdrawals from the PEA — the French 18.6% rate is not a global exemption.
• Depending on your destination country, the PEA may or may not be recognised as a tax-advantaged account. Some countries treat it as a standard foreign investment account and tax it accordingly.
• Some French brokers may close PEA accounts upon detecting non-resident status — check your broker’s policy before leaving.

Opening an IBKR or DEGIRO account first and ignoring the PEA is the most common structural error. The PEA’s 5-year clock cannot be backdated — every month you delay is time you cannot recover. Open the PEA first, then fill the CTO with overflow.

A physical UCITS ETF tracking MSCI World fails the 75% EU/EEA equity test and will be rejected by your PEA broker. You need the Amundi synthetic equivalent specifically structured for PEA compliance — always verify before buying.

Every dividend distribution from a dist ETF triggers a 31.4% PFU event in a CTO, regardless of whether you spend the money or reinvest it. Accumulating ETFs compound internally and defer all tax to the point of sale — meaningfully better for long-term investors.

Holding a CTO at IBKR, DEGIRO, or any non-French broker requires annual declaration on Formulaire 3916. Missing this is not a grey area — penalties start at €750 per undeclared account per year. French brokers handle reporting automatically; foreign ones do not.

The PEA eliminates income tax on gains after 5 years — not all tax. The 18.6% social charges still apply to every withdrawal. “Tax-free” is a common oversimplification; “tax-reduced” is more accurate. Plan accordingly when calculating your net return on exit.

When transferring positions from an international broker to a French one, many French institutions will not accept an in-kind transfer of tax lots — they require you to sell everything and re-buy. This crystallises your gains and resets the PAMP cost basis. Run the numbers before transferring.

The five-year clock starts on the account opening date — not the first investment. Open the PEA with a minimal deposit today; fund it gradually. Every day of delay is a day of the tax advantage not accruing.

The €150,000 cap is generous for most investors. Prioritise PEA-eligible synthetic global index ETFs inside the PEA. Only use the CTO for assets that genuinely cannot go there.

Distributing ETFs trigger a 31.4% tax event on every dividend payment in a CTO. Accumulating versions reinvest dividends internally — deferring the tax to the point of sale, which compounds meaningfully over time.

French tax uses a weighted average cost basis (PAMP) to calculate gains. Most brokers handle this automatically — but if you transfer positions between brokers, verify the cost basis data transfers correctly. Many French brokers require a full sell-and-rebuy to onboard positions from international brokers, which crystallises gains and resets the PAMP. Confirm the process before moving anything. If you hold a CTO at an international broker like IBKR or DEGIRO, a portfolio tracker like Sharesight can centralise your transaction history and make it easier to reconstruct cost basis figures when filing.

CTO accounts with international brokers (IBKR, DEGIRO) must be declared annually on Formulaire 3916. Foreign income is declared on Formulaire 2047. Non-disclosure carries heavy penalties — this is non-negotiable.

France’s assurance-vie is most efficient for bond exposure (fonds euro) and wealth transfer. After 8 years, it offers a reduced rate plus an annual tax-free allowance of €4,600 (singles) or €9,200 (couples) on gains. The €152,500 per-beneficiary inheritance exemption is the main reason larger portfolios include it.