Each year, you are charged a tax advance on the interest on your bank investments. But did you know that you might be able to escape it? Top time: you must make a request to your bank before the end of November to be exempt from tax withholding in 2024.
With the rise in rates, you have opened a classic bank book, other than the Livret A, LEP or LDDS regulations? Or a term account? Or a housing savings plan? Aside from the exempt or partially tax-free envelopes of the PEA, life insurance, Livret A or LDDS, taxation is the same for all gains from financial capital: 12.80% income tax And 17.20% social security contributions. Either 30% total. We are talking about a single flat-rate levy (PFU), or flat tax.
The range of investments affected by the flat tax thus extends from stock market income to traditional bank accounts and housing savings: PELs and CELs opened since January 2018 are in fact subject to tax from the first year of holding.
Home savings plan: when will I pay taxes?
This flat tax is collected in two stagesthe image of withholding tax on salaries and other income from work. 1. A perception the source at the time of payment of interest and dividends: we speak of a tax advance. 2. Regularization following the annual declaration income, taking into account what has already been collected.
Taxes: this little-known box that deprives you of an exemption, like millions of savers
Possible exemption from down payment on interest for the year 2024
If your household has little or no tax, you may still be exempt from the income tax advance, amounting to 12.80% SO.
Warning: it is already too late to be exempt from tax withholding on 2023 interest, which you will probably receive at the end of December. An exemption sent in the fall of 2023 applies to interest earned in 2024!
For the direct debit exemption request to be admissible, it must reach your bank, and each of the financial establishments where you hold a product concerned, before November 30, 2023included (unless your bank required you to receive the mail before this chance).
Attention. The request must be received by your bank by November 30. You can drop it off in person at the agency. If sent by mail, it is the date of receipt that counts: clearly, posting the letter on November 30 would be out of time.
This exemption request must be renewed each yearand it is sometimes necessary to anticipate sending the document to your (or your) bank(s) by a few days to take into account possible processing or delivery times.
Who can claim the tax deposit exemption?
The request for exemption from the 2023 tax withholding, also called request for exemption from withholding as a deposit or request for exemption from the non-dischargeable flat-rate withholding, takes the form of a simple declaration on honor.
For the interests bank books, PEL and all fixed income investments concerned, you must certify that your reference tax income (RFR) appearing on the 2023 tax notice does not exceed:
- 25,000 euros for single people;
- 50,000 euros for households subject to common taxation.
Concerning the request for a deposit dedicated to dividends, the approach is similar but the threshold differs. In this case, the RFR must not exceed:
- 50,000 euros for single people;
- 75,000 euros for households subject to common taxation.
Sample letter requesting exemption from tax deposit
Banks and financial institutions most often provide you with a pre-filled certificate. Otherwise here is the exemption request template provided by the tax administration.
I undersign, (…),
residing (…),
requests to be exempt from the withholding provided for in I of article 125 A of the CGI and certifies on my honor that the reference tax income of my tax household appearing on my tax notice established for the income of the penultimate year preceding the payment of fixed income investment products and similar gains mentioned in I of the aforementioned article is less than:
– 25,000 (for single, divorced or widowed taxpayers);
– 50,000 (for taxpayers subject to common taxation).
(…), THE (…),
(Date and signature)
Nota Bene. For the dividendsthe model is the same, modifying the amounts to 50,000 and 75,000 euros.
The annual declaration to finalize the procedure
The fact of requesting or not an exemption does not change anything on the final amount of income tax: the exemption only allows you to avoid paying an advance to the tax authorities.
About the interests 2024those which are the subject of the exemption request this fall: you must in all cases declare them on the occasion of the income tax return complete at spring 2025. You are free to choose, when making your declaration, the flat tax or the progressive scale option. You will then regularize thefinal tax on 2024 income during thet 2025.
PER and life insurance: exemption possible at the time of withdrawal
The withholding tax on earnings only concerns life insurance or the retirement savings plan (PER) at the time you make a withdrawal. Here is the rule for PER and life insurance, as explained on the tax website: By way of derogation, for products resulting from life insurance contracts and capital outflows from a retirement savings plan, the exemption request is made no later than the receipt of incomeand no longer before November 30 of the year preceding that of payment.
Taxes, land tax… These 5 tax-related opportunities for the end of 2023