If you invest from France, the account you use matters as much as the ETF you buy. The choice of PEA vs CTO, plus the option of an assurance-vie contract, decides how much tax you pay on your gains. In 2026 the gap grew a little, because social charges on most investment income rose from 17.2% to 18.6%.
In short
- The PEA is the most tax-efficient account: after five years, gains pay only 18.6% social charges.
- The CTO accepts any ETF but taxes gains at the 31.4% flat tax.
- Assurance-vie keeps social charges at 17.2% and gets an extra allowance after eight years.
- For most people, the best first step is to open a PEA early, even with a small deposit.
The PEA: the tax-efficient default
The Plan d’Épargne en Actions (PEA) is a French tax wrapper for European shares. You can deposit up to €150,000 in cash. Gains and dividends reinvested inside the plan do not count towards that ceiling.
The tax benefit depends on the age of the plan:
- After five years: you can make partial withdrawals without closing the plan. Gains are exempt from income tax and only pay social charges of 18.6%.
- Before five years: a withdrawal normally closes the plan, and the gains are taxed at the 31.4% flat tax. There are a few exceptions, such as dismissal or starting a business.
The five-year clock starts when you open the plan, not when you invest. That is why it makes sense to open a PEA as early as possible, even with a small first deposit.
Which ETFs fit in a PEA?
A PEA can only hold shares of European companies, or funds invested mainly in them. To give you exposure to the whole world, providers use synthetic ETFs: the fund holds European shares and uses a swap to receive the return of a world index. You can read more in our guide to physical vs synthetic ETFs.
Popular PEA-eligible world ETFs in 2026 include:
| ETF | ISIN | Annual cost |
|---|---|---|
| iShares MSCI World Swap PEA (WPEA) | IE0002XZSHO1 | 0.20% |
| Amundi PEA Monde MSCI World (DCAM) | FR001400U5Q4 | 0.20% |
| Amundi MSCI World Swap (CW8) | LU1681043599 | 0.38% |
Check that your broker lists the fund and that it is still PEA-eligible before buying.
The CTO: flexible but fully taxed
The Compte-Titres Ordinaire (CTO) is a standard brokerage account. It has no ceiling and no restrictions: you can buy any ETF, including physical world ETFs such as those in our guide to the best all-world ETFs, bond ETFs or individual shares from any country.
The price of that freedom is tax. From 2026, gains and dividends pay the flat tax (PFU) of 31.4%: 12.8% income tax plus 18.6% social charges. You can opt for the progressive income tax scale instead if it works out cheaper for you.
Assurance-vie: the long-term envelope
Assurance-vie is a life insurance savings contract, and it works very differently from a brokerage account. Many contracts offer a selection of ETFs as investment options.
Its main advantages:
- Social charges stay at 17.2%, because life insurance was excluded from the 2026 increase.
- After eight years, gains withdrawn benefit from an annual allowance of €4,600 for a single person or €9,200 for a couple.
- It is also a powerful tool for passing on wealth.
The downsides are the fees. On top of the ETF’s own cost, the contract charges a yearly management fee, often around 0.5%. The ETF choice is also limited to what the insurer offers.
PEA vs CTO vs assurance-vie at a glance
| PEA | CTO | Assurance-vie | |
|---|---|---|---|
| Deposit limit | €150,000 | None | None |
| ETFs available | PEA-eligible only | Any | Contract’s list |
| Tax on gains (long term) | 18.6% after 5 years | 31.4% | 17.2% plus income tax after the allowance |
| Extra fees | Broker fees only | Broker fees only | Contract fees, often ~0.5% a year |
PEA vs CTO: which one to open first?
For most French residents, a simple order works well:
- Open a PEA and invest regularly in one PEA-eligible world ETF.
- Add an assurance-vie with low fees if you want a second long-term envelope or plan to pass on wealth.
- Use a CTO only for what the other two cannot hold, such as physical ETFs or bonds outside a contract.
If you are new to investing, start with how to start investing in Europe. For the bigger picture across countries, read how ETFs are taxed in Europe.
Sources
- Hagnéré Patrimoine: PEA 2026, plafond et fiscalité
- Que Choisir: hausse de la CSG, revenus concernés
- PEA.fr: meilleurs ETF MSCI World éligibles PEA
This article is for educational purposes only and is not financial or tax advice. Rules and prices change; check official sources or a qualified adviser before making decisions.