How to declare your 2021 income tax on your 2020 income?
When you fill out your tax return in 2021, you will have the choice between the current mechanism and the 30% flat tax for the taxation of your investment income, including dividends received in 2020 and capital gains made in 2020.
You may choose a different taxation mechanism each year and this mechanism will apply to all of your investment income. Air Liquide therefore advises you to assess your overall taxation of dividends and capital gains from sales using both methods before making your decision.
The elements of taxation in this factsheet apply to French residents for tax purposes
Capital gains tax on sales
Tax on capital gains and losses on sales of investment securities must be paid to the tax authorities in September 2021.
Regardless of the acquisition date of shares:
The payment of tax on dividends received in 2020 is carried out in two stages:
1. In 2021, when dividends are paid
If you have sent a request to your account manager for exemption from the advance withholding before November 30, 2020 only the social contributions of 17.2% will be withheld;
If you do not fulfill the requirements to benefit from this exemption, social contributions of 17.2% will be withheld along with an advance withholding of 12.8%, i.e. a total advance withholding of 30%.
2. The balance will be applied in 2021 when you pay your 2020 income tax, according to the taxation method chosen.
How to complete your tax return?
To help you choose between the tax methods available to you and make an informed choice, before you complete your tax return for 2020 income, we recommend using the tax authorities’ simulator on the impots.gouv.fr website (for french residents only).
The tax return form, as well as the tax authorities’ simulator on the impots.gouv.fr website, applies the 30% flat tax (PFU) to your investment income by default.
You must select an option:
Please contact your local tax authorities if you have any questions.
A new statutory rate equal to at least 12.8% is withheld upon dividend payment by your account manager (Shareholder Services for direct registered Air Liquide shares, your financial institution for intermediary registered or bearer Air Liquide shares). However, in most cases, a tax agreement2 is signed between France and your country of residence. The main aim of this agreement is to set a flat tax rate which is withheld from your dividends.
To benefit from this rate, you must send form 50003 (corresponding to the request to apply the rate adopted in the agreement), completed and signed by the tax authorities of your place of residence, to your account manager by mid-April. This form must be resent to your account manager each year. Otherwise, the statutory rate of 12.8% will be applied upon payment of the dividend.
2 Tax agreement: a treaty between two countries aimed at avoiding the double-taxation of non-residents. 3 Cerfa form n°12816*01-02