How to Avoid or Not Pay Flat Tax (PFU)? Legal Strategies 2026

Updated March 2026 - Established under the acronym Single Flat Tax (PFU), better known by its Anglo-Saxon name "Flat Tax", this 30% levy affects almost all capital income in France (dividends, capital gains on the sale of securities, interest). If this 30% tax has greatly simplified the tax landscape since 2018 (including 12.8% income tax and 17.2% social security contributions), it remains confiscatory for managers and investors who are actively building their wealth. Is it possible to not pay this Flat Tax? Yes, by controlling the tax exemption pockets and the engineering schemes that the State authorizes to encourage savings.

Many managers don't know it, but the application of the Flat Tax is not obligatory. When filing your income tax return, you can opt, if it is more interesting for you, to have all of your capital income taxed at the progressive income tax scale.

When is this option magical?

If you are in a low Marginal Tax Band (TMI) (0% or 11%), the income tax on your dividends will be lower than the 12.8% of the PFU. In addition, choosing the progressive scale on dividends allows the application of a 40% reduction, considerably reducing the tax base!

Hayot Expertise Advice: Please note, the option for the progressive scale is global. You cannot choose the progressive scale for your dividends and the Flat Tax for the capital gain of your cryptocurrencies. Take the time to do both simulations before carefully checking the 2OP box on your tax return.

The Stock Savings Plan (PEA) is the ultimate tax shelter for stocks. The major tip favored by entrepreneurs is to house the securities of your own SARL or SAS in your PEA at the time of creation (subject to holding less than 25% of the rights with your family group).

The radical effects of PEA:

Since the PEA has been open for more than 5 years, it is a pure tax haven:

• ▸Dividends paid in the PEA are exempt from income tax (IR) up to 10% of the amount of the initial investment.
• ▸The capital gain on sale (when you resell your shares in the future) will be totally exempt from income tax. You will only have to pay the essential Social Security Deductions (17.2%). The global Flat Tax disappears!

Against the Flat Tax on more traditional investments, life insurance offers a protective cocoon as it ages.

When your contract has more than 8 years of "tax age", withdrawals (surrenders) benefit from a massive tax reduction (€4,600 for a single person, €9,200 for a married/partnered couple). Beyond this annual reduction, the applicable flat rate may drop to a rate of 7.5% instead of the traditional 12.8% of the Flat Tax (provided that certain outstanding ceilings of the income tax part are respected).

This is the Flat Tax's "weapon of mass destruction" for business leaders who plan to sell their operating company for several million euros. If you sell your shares directly personally, the Flat Tax destroys 30% of the capital.

The alternative strategy (150-0 B ter): Contribution-Disposal

1. ▸Before any promise of sale, you contribute the majority of your shares to a Holding company that you have just created.
2. ▸This contribution operation is not taxed (we speak of Tax Deferral).
3. ▸It is then the Holding which sells the shares to the buyer.
4. ▸Since the Holding has just received the securities at their current contribution value, it realizes almost no tax capital gains. Corporate Tax is zero! The Flat Tax is shattered. The "only" commitment to make in return is that your Holding will have to reinvest the money collected under conditions (at least 60% in the real economy) within two years.

👉 Discover the gigantic advantages of a Holding structure with regard to taxation

Although described as a “brutal withholding tax”, the 30% Flat Tax on the contrary offers many financial benefits. Housing your assets in a PEA, using reductions for the duration of holding on old securities, activating the progressive scale for small incomes or structuring your resales via a powerful holding company are the real keys to optimized taxation.

📞 Do you want to sell company shares or pay yourself heavy dividends? Do not fall prey to destructive imposition due to lack of anticipation and structuring. An upstream tax diagnosis can save hundreds of thousands of euros in taxes. Benefit from a high-balance sheet tax optimization strategy with our legal experts.

(Official sources: Articles 150-0 A, 150-0 D, and 150-0 B ter of the General Tax Code, Finance Law in force at the BOFIP source)