At a time when preparing for retirement is becoming a central issue in any wealth strategy, the individual Retirement Savings Plan (PER), introduced by the PACTE law in 2019, is becoming a reference tool. The old schemes (PERP, Madelin, etc.) are now closed to subscription, by unifying them within a flexible, readable and fiscally attractive framework. But beware of misinformation about its tax advantage in terms of income tax. Finankap Group takes stock of this tax level!

One of the main advantages of this plan is the deductibility of voluntary payments from the income tax base, within the limits of the available ceilings. For taxpayers taxed in the higher marginal brackets, the deduction provides a significant immediate tax gain. For example, a payment of €10,000 can generate €4,100 in tax savings for a 41% IMT (Marginal Tax Bracket).

While the tax advantage at the outset may seem attractive, it is nevertheless essential to anticipate your tax situation at the outset and understand the different terms and conditions for liquidating the plan. Indeed, in the event of a capital withdrawal, the capital paid in is reintegrated into the income of the year in the category of pensions without a flat-rate allowance of 10%, the interest generated is subject to the Income from Movable Capital (RCM) regime, i.e. either to social security contributions of 17.2% as well as to the single flat-rate levy of 12.8% or to a reintegration into the income tax scale.

In the event of annuity, the pensions received each year are taxed in the category of pensions after a 10% deduction. Social security contributions of 17.2% also apply to the share of the pension corresponding to voluntary contributions. It is taxable after deduction of an allowance set according to the age of the beneficiary at the time of the start of the pension, ranging from 30% before the age of 50 to 70% after the age of 69.

This deductibility at the time of entry can therefore lead to heavier taxation at the end of the tax in the event of an upward trend in IMT.  The choice of non-deduction at entry may then be more relevant. Here again, the taxation at the end will depend on the choice of collection of funds. Here is a table showing the different taxes in the event of a lump sum or annuity withdrawal, with or without deduction of voluntary payments:

NB: As the tax advantage is a tax deduction, it does not fall within the cap on tax niches.

For more information on this envelope, find our more general article about it with the following link: https://www.wealth-a7.com/fr/actualites/comprendre-le-per-/

PER is much more than just a retirement savings product. It is a real tool for tax optimization, asset structuring and, ultimately, transmission. And, for it to be as effective as possible, it must be put in place after a complete analysis of your current tax, patrimonial, civil and legal situation and any changes in your situation to come! To achieve this, it is therefore essential to call on a wealth management advisor to set up a tailor-made strategy that meets your expectations and needs. Call!

To go further: taxation at exit in the event of early redemption

The method of taxation of the capital resulting from the early release depends on the reason for the release. If the release is based on a reason other than that of the main residence, only the part of the interest generated in the contract is subject to social security contributions. If the release is motivated by the purchase of the main residence, the method of taxation is the same as in the case of a capital withdrawal due to cessation of professional activity.

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