Taxation of a Single-Member Limited Liability Company (EURL): What You Need to Know

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.