Taxation of PEA equity saving plans
It carries a certain number of tax incentives to that end. Qualifying conditions:
- Shares held in a PEA plan are not included in calculating the threshold for taxation of capital gains ;
- To qualify for all of the tax advantages offered by the PEA, amounts invested must be held in the plan for a minimum of 5 years from the plan’s opening date. If this condition is satisfied, dividends and capital gains on investments made within the PEA are tax exempt. The “avoir fiscal” tax credit linked to dividends received (up to January 1, 2005) is reinvested in the PEA.
- At the close of the plan, social security charges are the only form of taxation due on all capital gains realized.
- Any withdrawal from the plan within 5 years, even partial, automatically entails closure of the plan and cancellation of all tax advantages.
- Any withdrawal between 5 and 8 years of the plan’s commencement entails closure of the plan, but the holder is entitled to benefit from the tax advantages for the period during which the plan was in being.
- Beyond 8 years, PEA holders qualify for the full extent of the plan’s tax advantages. Partial withdrawals do not entail closure of the plan, but no further payments may be made into the plan. Total withdrawal, on the other hand, entails definitive closure of the plan.
Can I hold registered shares in a PEA plan ?
You can combine the advantages of registered share ownership and the PEA equity saving plan by opting for the “administered registered” formula. Veolia Environnement itself is not authorized to administer PEA plans, which preclude the possibility of combining a PEA with holding its shares in “pure registered” form, due to the complexity of the regulations governing these plans. You should check, however, that your financial intermediary does not charge significant additional fees for registering your shares in this form.