Taxation of a Single-Member Limited Liability Company (EURL)- Exclusive Article

Verified on January 1, 2025 – Directorate for Legal and Administrative Information (Prime Minister) An EURL is a limited liability company (LLC) with a single partner. It benefits from various tax reliefs. Partner Types:
  • Physical Person Partner
  • Corporate Partner
Physical Person Partner
  • Physical Person Partner

What is the tax regime of the EURL?

At the time of its creation, an EURL is automatically subject to the income tax (IR) regime. In other words, its profits will be taxed directly at the level of the sole partner, following the IR rules. Tax Return Declaration Every company must submit an annual tax return. The documents to be submitted and the declaration procedures will depend on the tax regime (micro BIC/BNC, simplified real, normal real) under which the company is placed. Micro BIC/BNC, Simplified Real or Normal Real: Which Tax Regime?
  • Micro BIC/BNC: When the company is under the micro-fiscal regime, the turnover or amount of receipts must be directly reported on the income declaration of the sole partner, using form no. 2042-C-PRO. The declaration must be done electronically, through the partner’s personal space on the impots.gouv.fr website.

Payment of Income Tax (IR)

The profits made by the EURL are included in the income tax base of the sole partner, under the category of industrial and commercial profits (BIC) or non-commercial profits (BNC). Thus, all the income of the sole partner will be subject to the progressive income tax scale, from 0% to 45% depending on the applicable tax bracket. Table – Progressive Scale Applicable to 2023 Income
  • Income up to €11,294: 0%
  • €11,295 to €28,797: 11%
  • €28,798 to €82,341: 30%
  • €82,342 to €177,106: 41%
  • More than €177,106: 45%
Attention: The 2025 finance bill could not be promulgated before January 1, 2025. The law no. 2024-1188 of December 20, 2024, allows the government to collect taxes, without modifying the tax brackets, until the adoption of a finance law for 2025. This scale will be updated after the publication of the 2025 finance law in the Official Journal.

Taxes to Which the EURL is Subject:

An EURL may be subject to a number of taxes. The main taxes are:
  • Value Added Tax (VAT)
  • Business Property Tax (CFE)
  • Corporate Value Added Tax (CVAE)
Other Applicable Taxes VAT: In principle, the company collects VAT on each sale and service it performs. It must then transfer the collected VAT to the tax authorities. The declaration and payment rules for VAT vary depending on the tax regime to which the company is subject:
  • VAT Exemption: The company makes an annual turnover of less than €37,500 for services or €85,000 for commercial and accommodation activities.
  • Simplified Real Regime: The company’s turnover is between €37,500 and €254,000 for services or between €85,000 and €840,000 for commercial and accommodation activities. Furthermore, the annual amount of VAT collected must be below €15,000.
  • Normal Real Regime: The company has a turnover greater than €254,000 for services or €840,000 for commercial and lodging activities. Moreover, the company is also subject to the normal regime when the annual VAT collected exceeds €15,000 (even if the turnover is within the limits for the simplified real regime).
  • VAT Exemption: The company benefiting from VAT exemption is exempt from the declaration and payment of VAT on sales and services it carries out. Sales or services are invoiced without VAT, i.e., tax-exempt.
Note: Each invoice must indicate the following: “TVA non applicable – article 293 B of the General Tax Code (CGI)”. By benefiting from VAT exemption, the company cannot deduct the VAT it has paid on purchases made in the course of its professional activity. The company can opt to pay VAT and charge it to clients, allowing it to recover the deductible VAT on professional expenses. The option request must be submitted in writing to the company’s tax office (SIE) and takes effect on the first day of the month during which it is declared. Where to Go? What is your city or postal code? Example: Sainte-Cécile-les-Vignes or 95200

CFE (Business Property Tax)

The business property tax (CFE) is a local tax owed by any company that habitually carries out a non-salaried professional activity and has an annual turnover of more than €5,000. Depending on the company’s location or activity, it may benefit from a permanent or temporary CFE exemption. Note: In the year of its creation, the company must submit a declaration (1447-C-SD) to benefit from a total CFE exemption. This declaration must be sent by post before December 31 to the SIE to ensure that the tax elements are set for the following year. CVAE (Corporate Value Added Tax) The CVAE is a local tax due by any company subject to the CFE and with an annual turnover exceeding €500,000. Additionally, a company with turnover over €152,500 must submit a declaration of added value and employee numbers, even if it does not owe CVAE. The company must pay the CVAE on its own initiative. It does not receive a tax notice. The payment methods vary depending on the amount of CVAE paid the previous year. The threshold is set at €1,500.

What is the tax regime of the EURL manager?

It is important to distinguish between the manager who is the sole partner and the manager who is not a partner.
  • Manager as Sole Partner: The manager who is the sole partner is subject to income tax (IR) on the profits made by the company, under the BIC or BNC category, depending on the company’s activity.
In case of a deficit, it can be offset against the global income of the sole partner in that year. The excess deficit can be carried forward to the next six years. Note: In this configuration, where the company’s profits are taxed directly in the name of the partner, no dividends can be distributed. Furthermore, any potential remuneration of the manager for their mandate is not deductible from the taxable profit.

Tax Advantages for the EURL:

A single-member limited liability company (EURL) can benefit from various tax advantages (non-exhaustive list), whether due to:
  • Its location:
    • Priority urban areas (QPV)
    • Employment areas to be revitalized (BER)
    • Urban areas to be revitalized (BUD)
    • Rural revitalization zones (ZRR) and rural revitalization zones (FRR)
    • Tax credit for competitiveness and employment (CICE) in Mayotte
  • Its activity:
    • Tax credit for crafts
    • Young innovative or university companies (JEI-JEU)
    • Innovation tax credit (CII)
    • Research tax credit (CIR)
  • Actions within the company or at the community level:
    • Sustainable mobility package
    • Family tax credit
    • Tax credit for companies carrying out energy renovation works
    • Tax deduction for the purchase of works of art
    • Tax reduction after a donation to a non-profit organization
Attention: The tax reliefs for businesses established in Priority Urban Areas (QPV) and activities created in Employment Areas to be Revitalized (BER) are valid only for businesses created or extended until December 31, 2024. Extensions of these exemptions are not currently planned. A physical person who subscribes in cash to the capital of a company may benefit from an IR-PME tax reduction equal to 18% of the payments made to the company.