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Share savings plan Income tax - How is a person's income taxed?

Verified 08 June 2023 - Legal and Administrative Information Directorate (Prime Minister)

Share savings plan The PEA is a savings product intended to be invested in the stock exchange.

The gains made under the EAP ( dividends, capital gains and other income) are exempt from income tax.

However, these gains are taxable in the following 2 cases:

  • Withdrawal on the PEA before 5 years
  • Income of unquoted securities held in the EAP

The taxation of an AEP's income depends on the date of withdrawals.

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No withdrawal or redemption

For the duration of the AAP, gains from investments made under the plan are not taxable, provided they are reinvested in the AAP.

However, the income of unquoted securities held in an EAP shall be exempt, each year, up to 10% the amount of such investments (i.e. the purchase value of such securities).

Income exceeding this limit is subject to a tax of 12.8% (and to 17.20% social security contributions).

Withdrawal or redemption after 5 years

If you withdraw money from your AAP after 5 years, your AAP earnings are exempt from income tax.

However, the income of unquoted securities held in an EAP shall be exempt, each year, up to 10% the amount of such investments (i.e. the purchase value of such securities).

Income exceeding this limit is subject to a tax of 12.8% (and to 17.20% social security contributions).

You can withdraw all or part of your PEA, without it being closed.

Withdrawal can also take the form of a life annuity.

FYI  

earnings from the EAP are subject to 17.20% of social security contributions (CSG, CRDS).

To perform your tax return, you can view the following documents:

If a pre-filled amount is inaccurate, you must correct or complete it.

Withdrawal or redemption before 5 years

If you withdraw money from your PEA (withdrawal or redemption) before the 5-year period of the savings plan, the net gain realized since the plan was opened shall be taxed at the rate of 12.8%.

However, if you wish, you can opt for a progressive scale taxation.

Net gain is the difference between the following 2 amounts:

  • Net asset value the PEA at the date of withdrawal
  • Amount of payments made to the plan since it was opened

However, early withdrawals are exempt from income tax in certain situations, such as:

  • Death of plan holder
  • Allocation of funds to finance the creation or takeover of a company, subject to conditions

FYI  

earnings from the EAP are subject to 17.20% of social security contributions (CSG, CRDS).

If you withdraw from your PEA before 5 years, the PEA is closed.

However, the closure of the plan does not take place under certain conditions.

This is particularly the case if you or your spouse (married or former) are in one of the following situations:

The 2022 withdrawals are reported in 2023 (2024 for 2023 withdrawals).

To complete your tax return, you can consult the explanatory note and the practical income tax brochure.

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