Flat tax for non-professional traders
France's flat tax, also called the Prélèvement Forfaitaire Unique (PFU), is 31.4% of taxable net capital gains. It comprises 12.8% income tax and 18.6% social levies.
If you trade stocks in an ordinary securities account with your own money as a private individual, this is the default regime.
As a non-professional trader, you don't need to create a business.
In that case, it's fairly simple: your capital gains are subject to the flat tax.
You report them on your personal tax return.
You can also choose the progressive income-tax scale. Be careful: that choice applies to all relevant income and gains, not just transactions you select.
Crypto has specific rules, which I cover below. For payouts, I explain reporting in the article on prop firm taxation.
How do non-professional traders report gains?
Follow these steps:
- Keep a record of all trades and profits or losses. You can get these directly from your broker
- Calculate your total annual net gain: gains minus losses
- Enter it in the securities capital-gains section of your income-tax return
For securities, you may need form 2074, particularly if you calculate gains yourself. You may be exempt from that form if your financial institution calculated them in full. For privately held crypto, the calculation uses form 2086.
Remember, flat tax applies to net gains. If your stocks produced €10,000 in gains and €2,000 in deductible losses of the same type, that leaves €8,000 in taxable gains before any eligible carried-forward losses.
And if you aren't profitable yet, I suggest reading my guide to learning to trade properly.
How much can you earn before trading gains are taxable?
In France, stock gains in an ordinary securities account are taxable from the first euro of realised net profit.
There's no minimum-profit threshold for these gains.
Privately held crypto has an exception: you're exempt if total relevant disposals don't exceed €305 during the year.
The €305 threshold concerns the amount sold, not the profit. Selling €1,000 of crypto for a €100 gain already exceeds it.
Above €305, the exemption disappears for all relevant disposals. Tax applies to the gain calculated under the tax rules, not the entire sale proceeds.
Even if you're exempt, you still need to report a foreign crypto account.
Are Forex and CFDs taxed differently?
For a private individual resident in France for tax purposes, occasional profits on financial derivatives are subject to the PFU by default, with the option to choose the progressive scale.
This includes CFDs and futures under the tax authority's rules.
Currency CFDs are financial contracts. Trading EUR/USD or GBP/JPY doesn't give them a different tax regime.
If your broker is abroad, you also need to report the account, even without a profit. I cover that below.
When do you become a professional trader?
If you trade more seriously, you could be considered a professional trader.
But you don't get to decide: the tax authorities can reclassify you as professional if you meet certain criteria.
They examine whether you trade under conditions comparable to a professional's. Relevant factors include:
- Your tools and information: particularly the specialised resources available to you and how you use them
- Your transactions: their number, complexity and scale
- Your organisation: including information gathering and techniques used
- Your trading income: it can be compared with other income. But earning more than your salary isn't enough on its own to make you professional
There is no automatic threshold based on gains or trade count. Frequently using an online broker or trading software isn't enough either.
Business structures for professional traders
Professional traders don't have to incorporate a company. You may also operate as a sole proprietor, depending on the regime applicable to your activity.
Your choice of structure affects taxation and legal protection.
Common structures include SARL/EURL and SAS/SASU.
Choosing between a SARL and SAS depends on your personal circumstances, long-term goals and remuneration strategy. Consult an accountant to choose appropriately.
SARL and EURL
A SARL, Société à Responsabilité Limitée, and its single-member equivalent, the EURL, are popular limited-liability structures for professional traders.
An EURL whose sole shareholder is an individual generally falls under income tax, with the option of corporate income tax (IS). A SARL defaults to IS.
Advantages:
- Attractive taxation in some cases, particularly with the income-tax option
- Protection of personal assets, with liability limited to contributions
Disadvantages:
- Social contributions on part of an owner-manager's dividends under IS, discussed below
- Less management flexibility than a SAS
SAS and SASU
A SAS, Société par Actions Simplifiée, and its single-shareholder equivalent, the SASU, offer more flexibility but also more complexity.
Advantages:
- Substantial flexibility in management and profit distribution
- The ability to retain profits in the company for reinvestment
Disadvantages:
- High social charges on the president's remuneration
- More complex administration
How professional trading profits are taxed
As a sole proprietor under income tax, your BNC profit, the French non-commercial income category, is added to other household income. In a company under IS, the company first pays tax on its profits.
Corporate income tax: IS
For a company under IS, the standard rate is 25%.
A reduced 15% rate applies to the first €42,500 of profit if the conditions are met, with 25% above that.
Those conditions include turnover no higher than €10 million and fully paid-up capital at least 75% owned by individuals or a qualifying company.
Tax applies to the company's taxable profit. If that is €100,000, IS is calculated on €100,000 even if you leave the money in the company.
Personal taxation
In an IS company, you're also taxed personally on what you pay yourself:
- Salary: subject to social charges and income tax
- Dividends from a SASU under IS: subject by default to the 31.4% flat tax in 2026, with the option of the progressive scale
For the owner-manager of an EURL under IS, social contributions and charges apply to the portion of dividends exceeding 10% of capital, share premiums and amounts held in the shareholder's current account. Income tax must still be calculated on dividends.
Deductible expenses for professional traders
Under the actual-expense regime, one advantage is being able to deduct certain business expenses.
That reduces taxable profit and therefore tax.
Examples include:
- Trading and analysis tool subscriptions
- Computer equipment such as computers and monitors, depreciated where required
- The business portion of office costs if you work from home
- Business travel, such as conferences or training
Keep every invoice! In a tax audit, you'll need to justify each deduction.
The importance of accounting
Whether you use a SARL or SAS, you need proper accounting.
It's a legal requirement and essential for managing your activity and optimising tax.
You need to:
- Record every transaction, including trades, deposits and withdrawals
- Keep all bank and trading statements
- Keep supporting documents for every business expense
- Prepare annual balance sheets and income statements
Thinking about retirement
Young traders don't always think about retirement, but it matters.
One way to build pension entitlements is through a salary or auto-entrepreneur status.
Dividends generally don't count towards retirement.
If building a pension matters to you, consider paying yourself a salary as your company's manager or president.
If you can't or don't want to take a salary, look into the individual PER retirement savings plan.
Foreign accounts
If you're a French tax resident trading with a foreign broker, you must report the account even if you made no profit.
Digital-asset accounts on foreign platforms are also covered. Use form 3916 / 3916-bis for accounts opened, held, used or closed during the year.
Failing to report a foreign account can lead to substantial fines. Be transparent with the tax authorities to avoid problems.
Tax rules change
Trading taxation changes regularly.
What's true today may not be tomorrow. Always check the rates applicable to the year in which you earned the gains you're reporting.
I recommend staying informed:
- Follow tax developments, particularly the annual finance bill
- Check current rates on official websites before filing
- Consult a tax professional to make sure your strategy still makes sense
A good accountant or tax adviser can save you a lot over time. Treat their fees as an investment, not just an expense.
They can help you:
- Choose the legal structure best suited to your situation
- Optimise the split between salary and dividends
- Stay informed about tax changes affecting you
- Prepare returns while minimising errors
- Defend your position in a tax audit
FAQ: trading taxation in France
How is a retail trader taxed in France?
For stocks in an ordinary securities account, a private individual defaults to 31.4% flat tax on taxable net gains. You can instead choose the progressive scale for all relevant income and gains.
The tax comprises 12.8% income tax and 18.6% social levies.
How do you report trading income?
Report trading income on your annual tax return, in the securities capital-gains section.
Calculate your annual net gain: gains minus deductible losses. Privately held crypto uses form 2086.
Is there a minimum amount before you have to report gains?
There's no minimum-profit threshold for stocks in an ordinary securities account.
For privately held crypto, the €305 exemption concerns total relevant disposal proceeds for the year, not profit. A foreign crypto account still needs reporting even if gains are exempt.
How is a professional trader taxed in France?
You don't have to incorporate. As a sole proprietor under income tax, BNC profit is added to other household income.
For a company under IS, the rate is 25%, with 15% on the first €42,500 of profit subject to conditions. You're also taxed personally on remuneration or dividends you pay yourself.
Can you deduct trading losses?
For securities, yes: losses can offset gains of the same type. Any remainder can be carried forward for ten years, but can't be deducted from salary.
For privately held crypto, losses can only offset same-type gains in the same year. They can't be carried forward.
Which expenses can a professional trader deduct?
Under the actual-expense regime, tax-allowable business expenses are deductible: trading tool subscriptions, computer equipment, the business share of office costs, relevant training and so on. Some purchases must be depreciated.
Keep all supporting documents.
How do you avoid being reclassified as a professional trader?
No trade count or income percentage automatically protects you from reclassification.
The authorities examine the actual conditions of your activity. Using an online broker or earning more than your salary isn't enough on its own to make you professional.
Must foreign trading accounts be reported?
Yes. If you're a French tax resident, financial accounts with foreign brokers and digital-asset accounts on foreign platforms must be reported using form 3916 / 3916-bis, even without profit.
Failing to report them can lead to fines.
How can you optimise your trading taxes?
If you're professional, consider creating an appropriate business structure.
Keep rigorous accounts and work with an accountant or tax adviser.
A big thank-you to Darki, a community member with accounting and tax expertise, for sharing his knowledge.
