Overview and purpose

• The differential contribution on high incomes (contribution différentielle sur les hauts revenus, CDHR) aims to ensure, in respect of 2025 income, a minimum taxation of 20% for the wealthiest taxpayers, in addition to income tax and the exceptional contribution on high incomes (contribution exceptionnelle sur les hauts revenus, CEHR).
• Initially intended for 2025 income only, it has been extended by the Finance Law for 2026 (loi de finances pour 2026) until the public deficit falls back below 3% of GDP
• Only taxpayers who are tax domiciled in France are concerned, where the reference income exceeds €250,000 for a single person or €500,000 for a couple subject to joint taxation

Scope and income taken into account

• Only French tax residents are liable for the CDHR, non-residents being excluded from it, as is also confirmed by the 2025 international tax doctrine.
• The income determining the scope of application corresponds to the reference taxable income (revenu fiscal de référence, RFR), so capital gains on cryptocurrencies are included
• Exceptional income, i.e. income which by its nature is not likely to be received annually and whose amount exceeds the average net income of the last three years, is taken into account for only one quarter of its amount for the CDHR
• The purpose of this “smoothing” mechanism for exceptional income is to avoid subjecting to the CDHR taxpayers who would remain below the threshold in the absence of one-off and exceptional income, including where such income is taxed at a flat rate, such as a capital gain taxed at 12.8%

Calculation: formula, base and parameters

• General principle: the CDHR is equal to the positive difference between 20% of the “adjusted” RFR and the sum of income tax, the CEHR and the withholding taxes in full discharge (prélèvements libératoires) on the income taken into account, with a flat-rate increase of €1,500 per dependant and of €12,500 for taxpayers subject to joint taxation
• The contribution thus aims at a minimum taxation of 20% at household level
• Exceptional income is included only up to one quarter in the CDHR adjusted RFR: capital gains realised by individuals on cryptocurrencies therefore appear to fall within the notion of exceptional income (note: this excludes cases of characterisation or recharacterisation as a professional activity, in which case the notion of exceptional income would a priori no longer apply)

Relief mechanism (décote)

• A relief (décote) reduces the amount resulting from applying the 20% rate to the adjusted RFR, for taxpayers whose adjusted RFR is less than or equal to €330,000 (single person) or €660,000 (couple subject to joint taxation)
• Amount of the relief: for a single person, the amount 20% × adjusted RFR is reduced by the difference between that amount and 82.5% of (adjusted RFR − €250,000); for a couple, by the difference between that amount and 82.5% of (adjusted RFR − €500,000)

 Summary table of relief parameters

Exceptional December 2025 advance payment and penalties

• An advance payment of the CDHR, equal to 95% of the estimated contribution, must be paid between 1 and 15 December 2025, on the basis of income realised as at 1 December and an estimate of income for December 2025
• In the event of non-payment or late payment, or if the amount of the advance payment is more than 20% lower than 95% of the CDHR actually due, a 20% surcharge applies, with a penalty base defined according to the case: 95% of the CDHR due in the event of non-payment/late payment, or the positive difference between 95% of the CDHR due and the advance payment made in the event of underestimation

Practical conclusion

• For 2025, calculate the estimated CDHR using the formula: 20% of the RFR minus income tax, minus the CEHR minus withholding taxes in full discharge minus allowances (for example €12,500 for a couple)
• Do not forget the advance payment to be made between 1 and 15 December 2025 (95% of the estimated CDHR): CAUTION, 20% penalty in the event of non-payment/late payment or significant underestimation
• The CDHR is distinct from the CEHR, is added to it, and concerns only French tax residents, non-residents remaining subject only to the CEHR

Estimated reading time: 5 minutes