As a result of a change in the tax authorities' position, since January1, 2024, a distinction must be made in SELs (e.g. SELARLs, SELASs) between remuneration received by partners for management functions and remuneration received for technical functions related to the professional activity, which is now taxed as BNC.
What does this new legislation entail?
A distinction must now be made between the SEL partner's technical remuneration and his remuneration for his corporate office.
Technical" remuneration corresponds to the work performed by the liberal professional in his technical capacity. In the absence of a subordinate relationship between the SEL and the partner, this remuneration will henceforth be taxed in the non-commercial profits (BNC) category.
Remuneration in respect of the "management" corporate mandate can be determined using conclusive tools and methods enabling the breakdown of remuneration to be determined. If it is not possible to make such a distinction, the tax authorities accept that "executive mandate" remuneration represents 5% of total remuneration, and therefore 95% of the remuneration to be taxed in the BNC category.
Why this reform?
When filing income tax returns, SEL partners' remuneration is eligible for a 10% deduction for professional expenses.
Conversely, remuneration declared in the BNC category does not benefit from this 10% discount. By declaring 95% of a self-employed professional's remuneration as BNC, the tax base is increased.
What are the consequences of this reform?
- Using a form, the liberal professional must register as a "SEL associate" with the SIE on which the Société d'Exercice Libéral depends. A SIREN number specific to the associate will then be created.
- From a tax point of view, the self-employed professional must file a 2035 declaration if he or she is subject to the controlled declaration tax regime. However, it will be possible to opt for the micro-BNC regime if the professional meets the conditions.
For the registration of this new status and the determination of the tax regime to be adopted, Exco offers you a mission of assistance; an optimization will be carried out between the micro BNC status and the controlled declaration.
How do you distinguish between management and technical remuneration?
Exco assists self-employed professionals in making this distinction, or in validating the prorata proposed by the tax authorities of 95% for technical remuneration and 5% for managerial remuneration.
This distinction between management and technical remuneration should be mentioned in the documents, as appropriate:
- minutes or articles of association for the remuneration of the corporate mandate ;
- minutes, articles of association, partners' agreement, etc. for the remuneration of the liberal activity.
In practice
- The professional will not have to pay a new CFE.
- The partner's technical remuneration does not oblige him to issue invoices to the SEL.
- Opening a dedicated bank account is not compulsory, unless compulsory and/or optional contributions are paid personally by the self-employed professional.
What should I do if I opt for the controlled declaration system?
Exco offers a tax return assistance service to help self-employed professionals fulfill their obligation to file Form 2035.
Your chartered accountancy firm is at your side to support you in all your endeavours, so don't hesitate to contact us.
