CSG ("Social Security Contribution On Income")

Investment income - Tax rate increase - Larger tax base

An instruction dated January 28, 1996 (5.I.1.97) explains the consequences of the reform of the CSG regime (contribution social generalisee, a special social tax applicable to revenues earned by individuals) arising from the Social Security Finance law of December 27, 1996.

1. The rate of CSG contributions is increased from 2.4% to 3.4%.

2. Investment income subject to withholding tax provided for by Article 125 A (relating to the taxation of interest on bonds) of the French Tax Code is liable to CSG contributions, except for income paid to beneficiaries domiciled outside France. CSG contributions are levied under the same conditions as the withholding tax applicable to investment income.