{"id":19986,"date":"2026-09-07T13:39:25","date_gmt":"2026-09-07T11:39:25","guid":{"rendered":"https:\/\/farewelltax.com\/litigation-alert\/"},"modified":"2026-10-01T11:44:22","modified_gmt":"2026-10-01T09:44:22","slug":"litigation-alert","status":"publish","type":"page","link":"https:\/\/farewelltax.com\/en\/litigation-alert\/","title":{"rendered":"Litigation Alert"},"content":{"rendered":"\t\t
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Litigation Alert: SASU Executives and Income Tax<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The government is demanding 18.6%<\/span> when you were supposed to pay 9.7%.\n<\/br>This interpretation is disputed.<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Since the summer of 2025, the tax authorities have been reclassifying SASU profits for income tax purposes as investment income, with retroactive effect for three years. No decision by the Council of State has resolved this debate. Our tax attorneys can help secure your financial situation or defend your case. <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tI received a tax assessment<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tAssess My Exposure<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t\t\t
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\n\t\t\t\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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7,500 \u20ac<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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difference per year for every 100,000 \u20ac in profit<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t

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\u20ac25,000+<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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amounts due over 3 years plus the current year, excluding interest<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t

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30 days<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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to respond to a proposed correction<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t <\/div>\r\n <\/div>\r\n \t\t\t<\/div>\n\t\t<\/section>\n\t\t

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What’s Going On<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Three Things to Understand Before Paying for Anything\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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01<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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A legal structure used by thousands of self-employed individuals<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\n\t\t\t\t\t\t\t\t\tArticle 239 bis AB of the General Tax Code (CGI) allows a single-member simplified joint-stock company (SASU) to opt for the partnership tax regime for five fiscal years: profits are taxed directly at the level of the sole member (as industrial and commercial profits [BIC] or non-commercial profits [BNC]), without the distribution of dividends. Consultants, developers, and independent professionals use this structure to avoid double taxation\u2014first on corporate income tax and then on dividends. \t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t
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02<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The tax authorities reclassify your profits as investment income<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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If you do not pay yourself any compensation for your professional services, the tax authorities consider that you are not enrolled in any social security program for self-employed individuals. As a result, your profits are subject to social security contributions on investment income: 17.2% (increased to 18.6% as of 2026), rather than the 9.7% rate applied to earned income. <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t

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03<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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A legal doctrine confirmed in June 2026\u2026 but without the force of law<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The ministerial response dated June 2, 2026 (Question No. 12673, Anne Bergantz) formalizes the position of the Ministry of Finance, which was applied retroactively for three years during audits. However, a ministerial response is not binding on the court, and the Council of State has never ruled on this issue. The reclassification is being contested. <\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t

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The 2-Minute Test<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Does this apply to me?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Five questions to assess your exposure and determine the best approach for your situation.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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