SAS: Taxation of profits

A SAS (Société par Actions Simplifiée) is a commercial company whose operation is relatively flexible compared to other legal statuses.

The majority of the principles governing its operation are specified in the articles of association: taxation methods, decision-making procedure, appointment of managers, etc. It even comes in single-person form (SASU) when only one partner takes part in the project.

The taxation of profits is not the same for all SAS companies, as it depends on the preferences of the managers.

You'll need to make this choice when you're setting up your company, and it's not a minor detail.

How are profits taxed in a SAS company? When and how to collect VAT? What other taxes are SAS companies subject to?

We'll try to answer all these questions in this article.

Benefits: How are SAS companies taxed?

Simplified joint-stock companies (SAS) are subject to corporate income tax (IS) by default when they are created. Profits refer to the turnover achieved minus all deductible expenses.

They are taxed at the following rates:

• 15% up to €38,120 in turnover. This is the reduced corporate tax rate.
• 28% between €38,121 and €75,000. This is the intermediate corporate tax rate.
• 33.33% beyond that. This is the standard corporate tax rate.

If at least 75% of a simplified joint-stock company's (SAS) capital isn't held by individuals and its turnover exceeds €7,630,000, it's taxed at the standard rate from the first euro, and therefore doesn't benefit from the reduced corporate income tax rate. In some cases, a rate of 28% is used.

It's important to remember that the company's tax on profits doesn't exempt the partners from paying income tax if they pay themselves a salary.

The recent tax reforms planned by the Philippe government should lead to a simplification of the taxation methods for SAS, and a reduction of the corporate income tax to 25% by the end of the five-year term.

If the partners want, they can choose to be taxed under the Income Tax (IR) system.

In this case, the company is no longer taxed directly, because the partners will pay the tax calculated on the amount of profits they receive.

This decision can be formalized if it is unanimously approved by the partners.

A SAS can opt for the partnership tax regime for a maximum of 5 financial years.

VAT: What are the rules for being subject to it?

Not all SAS companies collect or pay VAT according to the same rules.

 We need to distinguish between three cases:

• Some SAS companies are fully exempt from VAT. They do not collect it, do not pay it back, and therefore cannot recover it on their expenses. This measure applies to SAS companies whose turnover is less than €82,800 for the sale of goods to take away, to consume on the spot, the provision of accommodation; and €33,200 for other commercial or non-commercial activities.
• Some SAS companies benefit from the simplified VAT scheme if their turnover is less than €789,000 for the sale of goods to take away, to consume on the spot, the provision of accommodation; and €238,000 for other commercial or non-commercial activities. They are required to make an annual declaration, and can therefore recover it on their expenses.
• Beyond these amounts, SAS companies are subject to the standard real VAT system. The declaration becomes monthly, and all SAS companies can request to benefit from this system whenever they wish.

Other taxes: what other contributions do you need to pay?

When it comes to additional taxes, the CFE (Business Property Tax) is definitely the most well-known and applies to most SAS companies.

Those with a turnover of more than €152,500 must pay the CVAE (Corporate Value-Added Contribution).

Those with employees must pay the apprenticeship tax, and those with more than 20 employees are subject to the Contribution to the Construction Effort.

Ultimately, the tax system for your SAS (simplified joint-stock company) should be chosen based on the nature of your project, the number of partners involved, and your goals.

The complexity of some structures often requires the intervention of professionals to support the business leader and their teams in building the best possible project.