is this a taxable activity?

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Trading is a practice that generates profits and does not escape taxation and taxes. Dividends and capital gains from your investments in a securities account are subject to tax each year.

For the reduction of the invoice, it is possible for you to invest within a PEA, but that, while respecting certain limitations. In this article we will tell you more taxation in trading.

Taxation in trading

Taxation related to trading in France is somewhat different when it comes to occasional or professional traders. For the majority of independent traders, profits, trading CFDs, buying stocks or real estate appreciation, are subject to taxation with a ceiling of 30%. It looks like this:

  • 12.8% tax, you can choose your income tax rate;
  • 17.2% social security contributions.

It is true that the tax environment may seem quite heavy in France, but it is the cost of living in the country of the hexagon.

If you live in France, don’t try to avoid taxes, because it will always be a waste of money and time. You have two things you cannot avoid in life, namely, death and taxes. Although it is not possible for us to help you achieve tax optimization in offshore islands, it is still possible for us to guide you and help you understand the taxes in France, Belgium, Switzerland. and in all OECD countries.

Your trading earnings are subject to PFU

According to the regulations, be aware that the gains from your trading activities are subject to the PFUwhich is the abbreviation of the Single Lump Sum Deduction, and this, of 30%.

Such a tax regime is applied to all types of gains, including dividends, interest, capital gains, and regardless of financial investments (derivatives, shares, UCITS and bonds).

With regard to your capital gains, these will be taxed at the PFU, and this, after the compensation of the losses potentially incurred during the year.

Is it possible to reduce the taxation of your trading operations?

The answer is yes, but you must keep in mind that the alternatives to proceed with reducing the taxation of your trading operations are few.

The first principle is to keep your securities from one year to the next, so that the taxation of your capital gains is delayed. Indeed, if you sell a share, for example, and you generate a capital gain, the latter will not escape taxes at the end of the year. On the other hand, a latent capital gain, that is to say, the one you want to make, is not taxed. Regarding dividends, they will always be taxed.

Another solution which is also interesting is the fact ofcarry out your trading activities within a PEAbecause the latter is exempt from tax.

How does the PEA work?

The PEA is a securities account which only gives you the possibility of having shares of French and European companies.

This is, for many traders, the black point of the PEA. Indeed, by using the PEA, you will not be able to purchase shares of Asian or American commodities.

In addition, you will not also have the possibility of make an investment with leverage, whether it involves heavy by-products or using the SRD. The only way for your portfolio to be diversified is to use international equity ETFs eligible for the PEA.

Thus, the PEA will not be suitable for all styles of traders. Scalping and intraday trading, which is often done with leverage, will not fit the PEA.

However, if you like stock pickingwe strongly recommend the PEA, if only for your European shares.

Keep in mind that there are two kinds of PEA, namely:

  • The classic PEA : up to €150,000;
  • The PEA-SME : up to €225,000 and limited to SMEs and ETIs.

Of course, you can combine a PEA-PME and a classic PEA, provided that the combination of the two does not exceed €225,000.

How to be accompanied in the trading activity?

Trading, like the profession of trader, carries a sulphurous image with public opinion. These are all transactions for the purchase or sale of securities carried out on the financial markets. However, this practice is used by all finance professionals, private or public banks, insurance companies, the self-employed or even individuals. In this article we have presented to you, in addition to the notion of trading, the tax system that is applied in France and the solutions for optimizing these taxes.

If you want to get started in this activity, or if you simply want to deepen your knowledge on this subject, we advise you to use specialized brands in this field thanks to which you will know everything about trading. These very often take the form of a platform or an expert bank.

The advantages of this type of sign are numerous and we will try to present them to you. First of all you can create a special account to trade directly on these platforms. Secondly, for a few commission fees, you will be able to indulge in the practice of trading on the site by managing your securities portfolio through your personalized account.

Then, and this is a very important element if you want to succeed in this area, using experts allows you to benefit from sound advice and support. These can take various forms such as the publication of content, articles, recommendations. You can even get in touch directly with advisors if necessary. Finally, another advantage lies in the fact that you will have access to a wide choice of financial assets such as shares, bonds, loans, security deposits or debts.

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