Finance Glossary
Equity Savings Plan (PEA)
What is a PEA?
The PEA (Equity Savings Plan) is a French regulated savings product with favorable tax treatment, which allows the purchase of shares of companies listed in the European Union, units of collective investment schemes (UCITS, SICAV) invested at least 75% in shares of European companies, as well as eligible ETFs.
The PEA was created in 1992 to revive investment in French equities and has since been expanded to include shares of companies from the European Economic Area.
What is the taxation of the PEA?
The PEA allows for an exemption from income and capital gains taxes if certain conditions are met.
Thus, any withdrawal made before the fifth anniversary of the plan's opening results in the closure of the PEA and the taxation of gains based on the difference between the total valuation (securities and cash) and the cumulative amount of contributions.
Beyond 5 years, withdrawals or redemptions do not lead to the closure of the plan, and the gains are exempt from income tax but remain subject to social contributions.
Who can open a PEA?
Any adult taxpayer domiciled for tax purposes in France can open one (and only one) Equity Savings Plan (PEA). Contributions to a PEA are capped at 150,000 euros.
Persons subject to joint taxation can only hold one PEA per spouse or PACS partner.
Adult children attached to their parents' tax household can also open a "youth PEA," with a contribution limit of 20,000 euros until the end of their attachment to the tax household.