Calculating dividends in an SASU and the rules to follow

An SASU (Société par Actions Simplifiée Unipersonnelle) is a simplified joint-stock company with a single shareholder. However, that shareholder is not free to run the company however they like — they must comply with certain rules set by the State. Here is how to calculate dividends in an SASU. You also need to factor in the taxation that affects the net amount received by the sole shareholder, since you have options available to optimize the amount of tax you pay.

The rules for calculating dividends in an SASU

The chairman of the SASU can distribute dividends whenever he wishes. There is no deadline requirement, so he can let profits accumulate in the company’s account.

Calculating dividends in an SASU is only allowed when the company has a profit. This requires the result for a given financial year to be positive, after deducting any losses carried forward but also adding back any previously undistributed profits.

Furthermore, the chairman must have fully paid up the capital he subscribed and must have paid his cash contribution to the company in full. In addition, certain items on the balance sheet must be fully amortized. This notably concerns research and development costs, as well as formation expenses.

The last condition before starting the dividend calculation in an SASU, prior to payment, concerns the allocation of the result, which must account for a special reserve. This mandatory reserve, specific to the SASU, must reach 5% of its distributable profit. Once the reserve reaches 10% of the share capital, the obligation lapses.

How to calculate dividends in an SASU

The first step in calculating dividends in an SASU begins after the annual accounts have been drawn up. The financial statements consist of the balance sheet, the income statement and, in some cases, notes to the accounts. This gives the chairman the result for the financial year, which corresponds to the maximum amount he is entitled to pay himself.

Only the sole shareholder decides on the allocation of dividends in the SASU, after approving the accounts, within 6 months of the close of the financial year. The decision must be recorded in minutes, signed by the sole shareholder and entered in a special register.

Finally, if it has been decided to pay dividends, the sole shareholder must file a tax return called “Revenus de capitaux mobiliers — Prélèvement et retenue à la source” (Income from movable capital — Withholding tax), corresponding to form 2777-SD. When calculating dividends in an SASU, don’t forget to withhold tax on the gross dividend, so that only the remainder is paid out to the sole shareholder.

The SASU must settle its tax liability within two weeks of the dividend payment.

How to calculate the taxation on dividend payments

Calculating the taxation on dividends in an SASU first depends on the nature of the beneficiary. Indeed, in an SASU, the company’s sole shareholder can be an individual or a legal entity, i.e. another company. Note that dividends distributed by the SASU are not subject to social security contributions, whether the sole shareholder and the chairman are one and the same person or two different people.

Taxation of dividends paid to an individual

If the sole shareholder of the SASU is an individual, two options are available:

• either the dividends are subject to a flat tax (Prélèvement Forfaitaire Unique, or PFU) of 30%, which includes social security contributions and income tax;
• or the dividends are recalculated after an allowance, with the remainder subject to the progressive income tax scale.

If you choose the single flat-rate withholding tax — also known as the flat tax — you pay tax at a rate of 30% on the gross dividend amount. Income tax accounts for 12.8%, while social security contributions amount to 17.2%.

However, the 12.8% is only an advance payment. You will report this amount on your annual tax return in order to receive an equivalent tax credit. You are exempt from this advance payment if your income received in year N-2 remains below €25,000.

If you choose to have dividends subject to the progressive scale, you benefit from a 40% allowance on the gross dividend amount. In addition, 6.8% of the CSG becomes deductible from taxable income. The remaining 60% is added to the household’s other taxable income. The standard progressive scale is then applied.

To choose between the two options, you need to run the numbers to assess which taxation applies more favorably to your situation.

Taxation of SASU dividends paid to a legal entity

If the sole shareholder of the SASU is a legal entity, it benefits from the French “parent-subsidiary regime” for the taxation of SASU dividends. In this case, and provided a share of costs and expenses is added back, the distributed dividends are exempt from corporate income tax. The company holding the SASU benefits from the reduced tax rate of 15%.

Compensation for the chairman of the SASU

To pay himself, the head of an SASU can use the company’s dividends or pay himself a salary, or even combine both methods. There is no single best solution, as each option must be assessed through accounting calculations.

The entrepreneur’s desired level of social protection must then be taken into account. Depending on the option chosen, health coverage and reimbursement of care, as well as the quarters validated for retirement insurance, are not calculated in the same way. If you only pay yourself dividends, without paying yourself a salary, you have no social protection at all. Combining salary and dividend payments makes it possible to optimize the chairman’s income.