Flat tax 2026: what the Senate really says

Updated March 29, 2026 - The debate over the flat tax in 2026 has produced a lot of political noise. Between the parliamentary proposals for increases, the debates in the Senate, and the sometimes inconsistent updates of the official pages, it is easy to relay imprecise information. The correct method therefore consists of distinguishing proposals, political votes and the right actually enforceable or displayed in official tools.

In brief: The Senate rejected on November 21, 2025 the amendment aimed at increasing the CSG on income from assets (amendment no. 595, rapporteur Elisabeth Doineau, 208 votes against 133). However, the Social Security financing law for 2026 (law no. 2025-1403 of December 30, 2025) ultimately maintained the increase: the CSG increases from 9.2% to 10.6% on the majority of capital income, which brings social security contributions from 17.2% to 18.6% and the overall PFU from 30% to 31.4% since January 1 2026. Certain products, however, escape this increase and retain a rate of 30%.

To understand the situation, we must return to the legislative journey of this measure.

The vote of the National Assembly#

Amendment No. 127 to the PLFSS 2026, adopted at first reading by the National Assembly, proposed to increase the CSG rate for income from assets and investments from 9.2% to 10.6%, an increase of 1.4 points. This measure would automatically increase social security contributions from 17.2% to 18.6%, and therefore the PFU from 30% to 31.4%. The estimated yield was around 2.8 billion euros for financing Social Security (National Assembly — Amendment 127).

The Senate's rejection of November 21, 2025#

In the Senate, the Social Affairs Committee proposed the deletion of this article 6 bis of the PLFSS 2026 via amendment no. 595, carried by the general rapporteur Elisabeth Doineau. The committee justified its position by the fact that it was not in favor, in principle, of tax increases, considering that spending cuts should be the preferred way to reduce the déficit.

This deletion amendment was adopted in public session by 208 votes to 133 on November 21, 2025. It was this vote which caused certain media to say that "the Senate cancels the increase in the flat tax" (LégiFiscal — PLFSS 2026: the Senate cancels the increase in the flat tax).

The final text: the increase is well established#

Despite the senatorial rejection, the parliamentary shuttle ultimately resulted in the measure being maintained. Law No. 2025-1403 of December 30, 2025 to finance Social Security for 2026 recorded the increase in the CSG by 1.4 points on capital income ([ANAFAGC — CSG: Increase in the rate on capital income] (https://www.anafagc.fr/blog-maj/article/1144/csg-augmentation-du-taux-sur-les-revenus-du-capital)).

Concretely, since January 1, 2026:

• CSG: increases from 9.2% to 10.6% on the majority of capital income;
• Social deductions: increase from 17.2% to 18.6% (10.6% CSG + 0.5% CRDS + 7.5% solidarity levy);
• Overall PFU: increases from 30% to 31.4% (12.8% IR + 18.6% PS).

The parliamentary work of the Senate clearly shows that several amendments and debates focused on the PFU during the examination of the 2026 budget. On the other hand, as of March 29, 2026, the official tax sources consulted present a heterogeneity which maintains the confusion:

• the 2026 2025 income tax simulator continues to reason with a PFU at 30%;
• certain impôts.gouv.fr FAQs mention, for certain income or capital gains, a référence to 18.6% of social security contributions from January 1, 2026, which would increase the total to 31.4%.

This disparity is explained by the fact that the increase does not apply uniformly to all capital income.

Here lies the main nuance. The increase in the CSG does not affect all investments in the same way.

Income subject to the PFU at 31.4% (social security contributions at 18.6%)#

The following income is affected by the increase since January 1, 2026:

• Dividends from French and foreign shares (listed and unlisted);
• Marvelable capital gains (sales of securities, shares, bonds, fund shares);
• Interest on term accounts, bonds, unregulated bank accounts;
• Capital gains on cryptocurrencies when converting into euros or paying for goods/services (article 150 VH bis of the CGI);
• Income from an ordinary securities account (CTO);
• Redemptions on PEA of less than 5 years;
• Gains from BSPCE, stock options and free shares.

Income which retains the PFU at 30% (social security contributions at 17.2%)#

**Article L 136-8, IV of the Social Security Code maintains the CSG rate at 9.2% for certain exhaustively listed incomes:

• Land income;
• Real estate capital gains (articles 150 U to 150 UC of the CGI);
• Life insurance contracts and capitalization vouchers (article 125-0 A of the CGI);
• PEL interests opened before December 31, 2017;
• Interest and premiums on CELs opened before December 31, 2017;
• Products from popular savings plans (PEP) exempt from IR.

This distinction is fundamental: it means that life insurance, often presented as a pillar of the wealth strategy, is not affected by the increase in the flat tax in 2026.

To say that the increase in the flat tax was canceled by the Senate is too simplistic if we do not specify:

• if it is a proposal or a definitive text — the definitive text has recorded the increase;
• if we talk about the general PFU or a particular case — life insurance and real estate escape the increase;
• if the official tools have already integrated the measurement in a homogeneous way — this is not yet the case, hence the confusion.

For company directors who receive dividends, the difference between 30% and 31.4% represents 1.4 additional points on each euro distributed. On a distribution of 100,000 euros, that's 1,400 euros in additional taxes. The question is not trivial.

**As of March 29, 2026, caution dictates:

• to check the income category concerned before any arbitration;
• to check the official tools used for the déclaration (simulator, IFU, form 2042);
• to anticipate an arbitration between PFU and progressive scale if this makes sense for your situation;
• to review the distribution of your portfolio between tax envelopes (PEA, life insurance, CTO) taking into account the new rates.

PFU or progressive scale: how to decide in 2026?#

Flat tax applies by default, but the option for the progressive income tax scale remains open. This option is global: it applies to all of your capital income for the year in question.

The scale may be more advantageous if:

• your marginal tax bracket (TMI) is 0% or 11%;
• you receive significant dividends giving entitlement to the 40% reduction;
• you can deduct a fraction of the CSG (6.8%) from your taxable income.

On the other hand, for taxpayers whose TMI is 30%, 41% or 45%, the PFU generally remains more favorable despite the increase to 31.4%.

To find out more, see How to avoid flat tax?, Tax options for individuals 2026 and New tax measures of the Finance Law 2026.

We analyze the concrete consequences of tax changes on your dividends, your investments and your asset decisions.

Clarify the real impact of the flat tax on your situation

As of March 29, 2026, it is more accurate to speak of a budgetary debate leading to an effective but differentiated increase than of a pure and simple cancellation. The Senate clearly expressed its opposition, but the final law maintained the increase in the CSG. The result: a PFU of 31.4% for the majority of capital income, but a PFU of 30% which remains for life insurance, old PEL/CEL and property income.

The only serious position consists of verifying your concrete case before déclaration or distribution, taking into account the exact nature of each income and the official tools applicable at the time you arbitrate.

(Official sources: Senate — work on the PLFSS 2026, amendment no. 595; National Assembly — amendment no. 127 to the PLFSS 2026; law no. 2025-1403 of December 30, 2025 on the financing of Social Security; impôts.gouv.fr — 2026 simulator of the 2025 income tax; ANAFAGC — CSG: Increase in the rate on capital income; social security code — article L 136-8)