Reader concerns about taxation

Readers Bernardin and Micky have raised questions about how interest from regulated savings accounts in France is taxed. They are unsure if withdrawing interest beyond certain limits would still be tax-free and why some accounts seem to avoid taxation despite having withholding at source.

Regulated savings accounts and tax exemptions

Regulated savings accounts in France, such as the Livret A, LDDS, LEP, and Livret jeune, are designed to offer tax and social charge exemptions on the interest earned. These accounts come with specific rules, including limits on deposits, interest rates, and minimum balances, and the interest is not subject to taxation.

Rising costs of tax exemptions

The Bank of France has noted that the costs of maintaining these tax exemptions have been growing. In 2025, the cost reached 4.868 billion euros, compared to 3.667 billion euros in 2024 and just 1.01 billion euros in 2022. This increase is linked to higher interest rates and larger balances held in regulated savings accounts.

Proposal for a flat tax on interest

A recent proposal by the Court of Audits, outlined in a note titled The taxation of household wealth: for a reform of equity and efficiency, suggested introducing a flat tax of 31.4% on interest that exceeds the limits of these accounts. The proposal argued that the tax benefits disproportionately favor wealthier and older households, especially after the Livret A limit was raised.

No changes to current tax policy

Despite the proposal, the government has not implemented any changes to the current tax-free status of regulated savings accounts. As a result, Bernardin can continue to withdraw money from his regulated savings accounts without facing additional taxation. The current policy remains unchanged.