Taxation of SASU profits

Are you a SASU (simplified joint-stock company) or wondering whether this status is right for your business, particularly in terms of taxation?

It's true that when choosing your legal status, one point not to be overlooked is the taxation to which you will be subject.

So if, like most sole traders, you've opted for the SASU, what can you expect in terms of taxation?

SASU: taxation

Taxation of SASU profits

When you set up your SASU, you will be asked to choose the tax regime under which you wish to be taxed. As a company, the SASU is automatically subject to corporate income tax. Your profits will therefore be taxed under two systems.

Taxed in the company's name or in the name of the sole shareholder

Either these profits will be taxed in the name of the company, possibly at a reduced rate and then at the standard corporate income tax rate. Or they will be taxed in the name of the sole shareholder. In this case, taxation will only be possible for a maximum of 5 years. Your profits will then automatically be taxed at the corporate income tax rate.

Note, however, that for this option to be considered, certain criteria must be met, such as :

• Not listed on the stock exchange,
• Carry on an industrial, commercial, craft, agricultural or liberal activity as your main occupation,
• Less than 50 employees,
• Sales of less than 10 million euros,
• The sole shareholder must be a natural person in a managerial position.

As a SASU is by default subject to corporation tax (IS), make sure you mention your option for the partnership regime.

Choosing between corporation tax (IS) and personal income tax (IR) for a SASU

In order to choose between these two tax systems, a comparative study is required. This study should enable you to identify two important decision-making criteria:

• Tax burden in the 2 scenarios
• The net income you can expect to generate in both cases

To help you make the right choices, here's a comparison chart that will help you draw parallels between the two plans.

If the choice of taxation is up to you, here are a few things you can do to tip the balance in one direction or the other, depending on your objectives.

Choosing a SASU

SASU (simplified joint-stock company) tax status: what does it involve?

As an Associate Chairman subject to income tax, your remuneration is not deductible from your taxable profit. In fact, the amount is directly included in your taxable BIC or BNC. Note that in this case, your remuneration is not taxable as salary and wages. This makes it difficult to manage your taxable profit , since your remuneration is not deductible.

Finally, you should be aware that you will need tojoin an accredited management center to avoid a 25% surcharge on the amount of profits subject to income tax.

SASU à l'IS: what does it involve?

The consequence of this tax election is that profits are taxed by the SASU.

You will therefore be taxed at two rates as follows :

• 15% up to €38,120
• 33.1/3% for the fraction above

You'll be able to control the amount of your taxable income.

Conclusion

Choosing your tax regime as Chairman of a SASU is a personal choice that will depend above all on your personal tax situation.

While both systems have their advantages, the consequences are not the same. It is therefore advisable to carry out a comparative study between these two hypotheses in order to determine which system is best suited to your situation and activity.

Note that if you opt for a SASU taxable under the IR system, this tax regime will only last for 5 years, after which you will automatically switch to the IS system.