is this a taxable activity?

To consult Hide the table of contents

Trade 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 taxed every year.

To reduce the invoice, it is possible for you to invest in a PEA, but that while respecting certain restrictions. In this article we will tell you more taxation in trade.

Taxation in trade

Taxation related to trading in France is somewhat different when it comes to occasional or professional traders. For the majority of independent traders, profit is trading CFDs, buying shares or property valuation subject to taxation with a ceiling of 30%. It looks like it:

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

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

If you live in France, do not try to avoid tax, 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 on 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 rules, you must be aware that the gains from your trading activities are subject to PFUwhich is the abbreviation of Single One-off Deduction, and this of 30%.

Such a tax scheme 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 PFU, and this after compensation for any losses that may have occurred during the year.

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

The answer is yes, but you have to keep in mind that the alternatives have to go ahead with reduce the taxation of your trading activities 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. If, for example, you sell a share and you generate a capital gain, the latter does not escape tax at the end of the year. On the other hand, a latent capital gain, i.e. the one you want to achieve, is not taxed. Regarding dividends, they will always be taxed.

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

How does PEA work?

PEA is a securities account which only allows you to hold shares in French and European companies.

For many traders, this is the black point of PEA. Using PEA, you will not actually be able to buy stocks in Asian or US commodities.

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

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

But if you want stock pickingwe strongly recommend PEA, if only for your European stocks.

Remember that there are two types of PEA, namely:

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

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

How is one accompanied in the trading activity?

Trade, like the profession as a trader, carries a sulphurous image with public opinion. These are all transactions for the purchase or sale of securities carried out in the financial markets. However, this practice is used by all financial professionals, private or public banks, insurance companies, self-employed or even individuals. In this article we have presented to you, in addition to the concept of trade, the tax system used in France and the solutions to optimize 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 area, 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 many, and we will try to present them to you. First of all, you can create a special account to trade directly on these platforms. Second, 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 personal account.

So, and this is a very important element if you want to be successful in this field, using experts allows you to benefit from sound advice and support. These can take various forms such as publishing content, articles, recommendations. You can even get in direct contact with advisors if needed. Finally, another advantage lies in the fact that you will have access to a wide selection of financial assets such as shares, bonds, loans, collateral or debt.

Leave a Comment