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Equity Savings Plan (EAP)

Verified 01 octobre 2019 - Directorate for Legal and Administrative Information (Prime Minister)

The share savings plan (APP) is a regulated savings product. It allows the acquisition and management of a portfolio of shares of European companies, while benefiting, under conditions, from a tax exemption. There are two types of PEA: the classic EAP (banking or insurance), and the EAP-SME, dedicated to securities of SME and ETI.. The conditions for the opening of the plan, the securities which it may hold, the conditions for the payment, withdrawal and benefit of the tax benefit are regulated.

Classic Banking PEA

The banking EAP allows to acquire a portfolio of shares of European companies while benefiting, under conditions, from a tax exemption. The payment limit is €150,000..

Tax Home

You can open an AAP if you domiciled in France..

Age

You must be an adult to be able to open an AAP.

Number of PEAs per person

Only one PEA can be opened per adult.

Your spouse or partner of Pacs and your adult children chargeable may also open an AAP.

But the ceiling of the PEA dependent children, called PEA-young, is limited to €20,000..

  Please note : You can combine a banking and a small business.

Signing a contract

When opening the AAP, you sign a contract with the bank.

The opening date is the date of the 1to payment.

Only cash payments are allowed.

Payments feed a cash account.

Cash account payments are used to purchase securities which are then registered in a securities account.

The following securities may be included in a banking AAP:

  • Shares, investment certificates, shares of SARL
  • Shares of collective investment undertakings (UCITS, Sicav, etc.)

To find out whether a title can be included in your AAP, you can consult its description on a stock exchange website or in a specialized newspaper. The description of the title shall indicate whether it is eligible for the AAP.

Since 6 December 2016, the sums paid into the AAP may not be used for the acquisition of securities held outside the AAP by

  • the holder of the plan,
  • the person he/she lives with
  • or ascending or descendants..

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Before 5 years

Partial withdrawals before 5 years lead to plan closureexcept in the following cases:

  • Enterprise takeover or creation
  • Termination, invalidity or early retirement of the holder or his spouse or partner of Pacs
  • Withdrawal of the plan for liquidated corporate securities

After 5 years

Partial withdrawals after 5 years do not close the plan.

The plan continues to work, and new payments can be made.

The ceiling of the banking EAP is €150,000.. Its calculation does not take into account the gains made since the opening of the plan.

The taxation of revenues of the depends in particular on the date of withdrawals.

The revenues of the AAP are subject to social contributions regardless of the date of withdrawal.

The following operations shall result in the closure of the AAP:

  • Withdrawal before 5 years (except authorized withdrawal cases)
  • Failure to comply with any of the operating conditions (e.g. exceeding the ceiling on payments)
  • Death of the holder
  • Withdrawal after 5 years of all sums or values and conversion of capital into life annuity

Classic PEA Insurance

The EAP insurance is purchased from an insurance company. It takes the form of a funding agreement in account units.. The amounts paid are invested in securities that may be included in a bank AAP.

Tax Home

You can open an AAP if you domiciled in France..

Age

You must be an adult to be able to open an AAP.

Number of PEAs per person

Only one PEA can be opened per adult.

Your spouse or partner of Pacs and your adult children chargeable may also open an AAP.

But the ceiling of the PEA dependent children, called Younger PEA, is limited to €20,000..

  Please note : you can combine an insurance and 1 small business.

Signing a contract

When you open the AAP, you sign a contract with the insurance company.

The opening date is the date of the 1to payment.

The EAP insurance consists of funding agreement in account units.. The insurance company shall record the amount of cash payments.. The sums paid shall be used to pay premiums and contract costs.

The investment vehicles are identical to the banking PEA, but you cannot buy them online:

  • Shares, investment certificates, shares of SARL
  • Shares of collective investment undertakings (UCITS, Sicav, etc.)

Since 6 December 2016, the sums paid into the AAP may not be used for the acquisition of securities held outside the AAP by

  • the holder of the plan,
  • the person he/she lives with
  • or ascending or descendants..

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Before 5 years

Redemptions before 5 years will result in closure of the plan, except in the following cases:

  • Enterprise takeover or creation
  • Termination, invalidity or early retirement of the holder or his spouse or partner Pacs
  • Withdrawal of the plan for liquidated corporate securities.

After 5 years

Buybacks after 5 years do not result in closure of the plan.

The plan continues to work, and new payments can be made.

The ceiling of the EAP insurance is €150,000.. Its calculation does not take into account the gains made since the opening of the plan.

  Please note : the conventional EAP insurance and the EAP-SME are cumulative, but the total amount paid on these 2 plans by the same holder cannot exceed €225,000..

The taxation of revenues of the depends in particular on the date of withdrawals.

The revenues of the AAP are subject to social contributions regardless of the date of withdrawal.

The following operations shall result in the closure of the insurance EAP:

  • Any redemption made on the capitalization contract before 5 years (except authorized redemption cases)
  • Failure to comply with any of the operating conditions (e.g. exceeding the ceiling on payments)
  • Death of the holder
  • Total purchase after 5 years of the capitalization contract

PEA-SME

The SME-SME program is intended to finance small and medium-sized enterprises (SMEs) and medium-sized enterprises (MSEs). It operates as a banking AAP, with the exception of the payment limit (€225,000), and securities that may be invested in them.

Tax Home

You can open an AAP if you domiciled in France..

Number of SMEs per person

Only one SME-AAP may be opened per person, up to 2 plans per tax home (one SME for you and one for your spouse or partner of Pacs).

People tax at your expense (e.g. children) cannot have an SME-SME.

  Please note : you can combine a conventional AAP (banking or insurance) and an SME-AAP.

Signing a contract

When opening the AAP, you sign a contract with the bank.

The opening date is the date of the 1to payment.

Payments and authorized uses

Only cash payments are allowed. They feed a cash account to buy securities.

The securities acquired are then entered into a securities account. Only certain securities may be acquired through payments made to the AAP and recorded in the securities account. They must be held by:

  • the holder of the plan,
  • the person he/she lives with
  • or ascending or descendants..

Securities which may be subject to direct investment

SME

The sums paid into the SME AAP may be directly invested in the following SME securities:

  • Investment shares or certificates of companies and cooperative investment certificates
  • Shares SARL or companies of equivalent status, and securities representing the capital of cooperative societies
  • Miniature

SME ETI

The sums paid out of the SME AAP can be directly invested in the following SME securities ETI ::

  • Bonds convertible or redeemable in shares (excluding bonds redeemable in unlisted shares)
  • Participatory securities and fixed-rate bonds, acquired through a professional, via a website approved by the Autorité des marchés financiers.

An SME ETI is:

  • a company with fewer than 5,000 employees and less than €1.5 billion, or a balance sheet total not exceeding €2 billion
  • or a listed undertaking whose market capitalization is less than €1 EUR 1 billion, which is below certain staff and accounting thresholds. The company must employ fewer than 5,000 people, and its annual turnover must be less than €1.5 billion or its balance sheet total must be less than €2 billion.

Securities which may be subject to indirect investment

The sums paid into the SME AAP may be invested indirectly in the following securities:

  • Shares of variable capital investment companies, the capital of which is composed of more than 75%of securitiesETIof which at least 2 third are shares, units, investment certificates or bonds convertible or redeemable into shares
  • Mutual fund shares (UCITS, Sicav, etc.) with more than 75 % equityETIof which at least 2 third are shares, units, investment certificates or bonds convertible or redeemable into shares
  • Shares of collective investment undertakings (UCITS, Sicav, etc.) established in the European Economic Area, of which more than 75% of securitiesETIof which at least 2 third are shares, units, investment certificates or bonds convertible or redeemable into shares
  • Mutual fund shares at risk
  • Shares or shares AIF authorized, provided that more than half of their assets are permanently invested in shares, units, investment certificates or bonds convertible or redeemable into shares, and that they do not hold any dematerialized real estate assets.

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Before 5 years

Partial withdrawals before 5 years cause the plan to close, except in the following cases:

  • Enterprise takeover or creation
  • Termination, invalidity or early retirement of the holder or his spouse or partner of Pacs
  • Withdrawal of the plan for liquidated corporate securities.

After 5 years

Partial withdrawals after 5 years do not close the plan.

The plan continues to work, and new payments can be made.

The ceiling for SMEs is €225,000.. Its calculation does not take into account the gains made since the opening of the plan.

  Please note : the SME-SME and the traditional SME (banking or insurance) are cumulative. However, the total amount paid on these 2 plans by the same holder may not exceed €225,000.. Even in the case of cumulation, the ceiling of the classical EAP shall not exceed €150,000..

The taxation of revenues of the depends in particular on the date of withdrawals.

The revenues of the AAP are subject to social contributions regardless of the date of withdrawal.

The following operations shall result in the closure of the AAP:

  • Withdrawal before 5 years (except authorized withdrawal cases)
  • Failure to comply with any of the operating conditions (e.g. exceeding the ceiling on payments)
  • Death of the holder
  • Withdrawal after 5 years of all sums or values and conversion of capital into life annuity