Social Contributions on Investments
The potential increase in social contributions on investments from 17.2% to 18.6% is a significant consideration for investors. Currently, the total social levy is 17.2%, comprising:
- Generalized Social Contribution (CSG) at 9.2%,
- Contribution for the Repayment of Social Debt (CRDS) at 0.5%,
- and the Solidarity Levy at 7.5%.
Raising the CSG by 1.4 points to 10.6% would push the overall social levy rate to 18.6%.
Impact of CSG Increase on Your Investments
Should this increase be confirmed, the net yield of your investments will decrease. For instance:
- An investment yielding 3% annually before tax will now offer a net rate of 2.05% (down from 2.1%).
- An investment yielding 5% annually will see its net rate drop to 3.43% (from 3.5%).
The proposed legislation also suggests that the CSG rate could rise to 11.2% by 2027, potentially generating an additional 4 billion euros.
Which Investments Are Affected by the CSG Increase?
Currently, the increase affects income and capital gains from savings and investments (life insurance, dividends, employee savings, PEL, etc.), as well as real estate income subject to the progressive income tax scale and taxable real estate capital gains. Only state-regulated savings accounts (Livret A, LDDS, LEP, Livret Jeunes) are exempt from tax.
Further Reading on Our Site
History of Social Contributions
The CSG was introduced in 1991 at a rate of 1.3% by the Rocard government, initially to address the social security deficit. It has been applied to financial investments since 1997, with the rate starting at 3.4% and increasing over time.
The CRDS, also introduced by the Rocard government, aimed to reduce social security debt and was intended to be temporary, ending in 2009...
The Solidarity Levy combines three taxes into a total rate of 7.5%.
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