Introduction to PFNL (Prélèvement Forfaitaire Non-Libératoire) Tax

PFNL (Prélèvement Forfaitaire Non-Libératoire) is a tax withheld on income payments (cash interest, dividends, coupon, and issue premium in relation with principal payments) on any undermentioned instrument or product. This is a flat tax and is calculated in addition to the withholding tax (WHT) and it applies to the individuals who are fiscally residents in France. PFNL is voluntary only, therefore a mandate (customer’s instruction) allowing the bank to act on his behalf is mandatory.

This functionality allows banks to calculate the PFNL French tax.

The following items are introduced as part of this functionality:

• The Pfnl Mandate Recd and Eff Tax Res fields are added to the CUSTOMER application to indicate whether the mandate is received or not and to capture the effective tax residence of the customer.
• The Taxable Basis Tax Type, Taxable Basis Amt, and Tax Credit Amt fields are added to the ENTITLEMENT application to capture the corresponding tax type for the taxable basis amount, amount field in the event currency, and tax credit amount based on Double Tax Treaty (DTT) rate in the event currency.
• The FRPFNL.TAX.PARAMETER application is used to define the calculation of taxable basis amount for each event and parameterize the appropriate events and sub-asset type for which the PFNL tax is applicable.
• The CUSTOMER,FRPFNL.INPUT version is used to create customer records with the effective tax residence and PFNL mandate flags.
• The CUSTOMER,FRPFNL.NAU version is used to authorise the customer records with the effective tax residence and PFNL mandate flags.
• The FRPFNL.TAX.SIMULATOR enquiry is used to check if a portfolio ID is subjected to the PFNL tax or not.

Click here to understand the terms and abbreviations used in this functionality.