PEA: the 5-year rule, explained with numbers

The PEA (plan d'épargne en actions) is the best-known French account for shares. Its advantage depends on one date: the fifth anniversary of the plan. Before it, a withdrawal costs almost as much as in an ordinary account. After it, income tax is gone.

When the clock starts

The clock starts on the date of your first payment. A payment made in year four does not restart it. This is why many investors open a PEA early with a small amount, even if they plan to invest more later.

A withdrawal before 5 years

Say you paid in 60,000 euros and the plan is worth 90,000 euros. The gain is 30,000 euros.

If you take money out before 5 years, the gain in the withdrawal is taxed at the flat tax: 12.8% income tax plus 18.6% social levies, so 31.4% in 2026. On the whole gain, that is 9,420 euros. In most cases the withdrawal also closes the plan. The law makes a few exceptions, such as money used to start a business, or a job loss.

A withdrawal after 5 years

After the fifth anniversary, the same withdrawal pays no income tax. Only the social levies remain: 18.6% of 30,000 euros, so 5,580 euros. That is 3,840 euros less than before the mark.

A withdrawal after 5 years no longer closes the plan, and you can keep paying in.

Partial withdrawals

You do not need to take everything. A partial withdrawal is part capital and part gain, in the same proportion as the whole plan. In our example, the gain is a third of the plan, so a withdrawal of 9,000 euros contains 3,000 euros of gain, and the social levies are 558 euros.

While you hold it

Inside the plan, dividends and sales are not taxed at all, whatever the age of the plan. You can sell one ETF and buy another without any tax. One exception: a foreign company's dividend can lose a withholding tax at source that the PEA cannot get back.

Track your PEA with the rest of your portfolio in Cadances

A PEA is rarely your only account. Cadances is a portfolio tracker: it keeps your PEA next to your assurance-vie, your CTO and your other accounts, with one total and one allocation.

• The clock, visible. Tell Cadances when you opened the plan and what you paid in, on the Portfolios screen. The Tax screen then shows the age of the plan, the time to its 5-year mark, the gain inside, the room left under the ceiling and what a withdrawal today would cost.
• Social levies, not hidden. The PEA shows no income tax, and says plainly that social levies are still due on the gain when you withdraw.
• Performance that counts. Compare your PEA with the market on Performance, and see each dividend it receives.

Start free. Create your Cadances account: no card, no time limit. The Free plan holds one portfolio of up to 15 holdings, which is enough for one PEA. To track your PEA next to your other accounts, compare the paid plans.

The bottom line

• The 5-year clock starts with your first payment.
• Before 5 years, the gain pays 31.4% in 2026, and the withdrawal usually closes the plan.
• After 5 years, the gain pays only 18.6% social levies, and the plan stays open.
• A partial withdrawal is taxed on its share of gain only.
• Open a PEA early, even with a small amount, to start the clock.

This article is general information, not tax or legal advice. Your own situation and your bank's documents decide what applies to you.