The President of France announced on 29 April 2013 that the tax regime on capital gains is to be modified. To encourage entrepreneurship the government will simplify the different existing regimes.
Since 1 January 2013, occasional capital gains on shares, bonds and similar securities are generally subject to income tax at the progressive rates.
Under the general regime, capital gains derived from the sale of shares in companies resident in France could be cut down by as much as 65% in the case of long holding periods, resulting in an effective tax rate of 32.75%.
In addition, investors in small and medium enterprises (SMEs) and owners going into retirement will benefit from even more favorable rebates, again based on the duration of the holding period. In that case, the capital gains tax rate could be cut down by as much as 85%, resulting in an effective tax rate of 23.75%.
