France EURL vs SASU Tax FAQ: Income Tax vs Corporate Tax

A solo founder in France typically chooses between EURL (Entreprise Unipersonnelle à Responsabilité Limitée) and SASU (Société par Actions Simplifiée Unipersonnelle). Legally, both are single-member limited liability companies. But their tax treatment, social security treatment, and administrative cost diverge significantly. This FAQ helps founders make the right choice for their situation in 2026.

Q1. What is the default tax regime of an EURL?

The default regime of an EURL depends on whether the sole associate is an individual or a legal entity:

• Sole associate is an individual (natural person): default regime is impôt sur le revenu (IR) — income tax. The company’s profit is reported on the founder’s personal income tax return as BIC (Bénéfices Industriels et Commerciaux) or BNC (Bénéfices Non Commerciaux), depending on the activity.
• Sole associate is a legal entity (e.g., another company): default regime is impôt sur les sociétés (IS) — corporation tax.

The individual associate of an EURL can opt for IS by election under Code général des impôts art. 206-3. The election is irrevocable after 5 years.

Source — CGI art. 206-3: https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000044979441

Q2. What is the default tax regime of a SASU?

The default regime of a SASU is impôt sur les sociétés (IS) under CGI art. 206. The company is taxed as a separate person at the corporate rate; salary and dividends to the sole shareholder are then taxed in the shareholder’s hands.

A SASU can temporarily opt for IR — under CGI art. 239 bis AB, for up to 5 financial years — provided certain conditions are met (recently formed, fewer than 50 employees, turnover under €10m, etc.). After 5 years, the SASU returns automatically to IS.

Q3. What are the corporation tax rates in 2026?

The standard French corporate tax rate is:

To qualify for the 15% reduced rate, the company must have:

• Turnover < €10m.
• Capital fully paid up.
• At least 75% held by individuals (or qualifying entities).

Larger groups or non-qualifying companies pay 25% on all profit.

Source — Service-public.fr corporate tax: https://entreprendre.service-public.fr/vosdroits/F23575

Q4. What about income tax under IR for EURL?

Under IR, the EURL’s taxable profit (after deduction of expenses, including the founder’s social security charges but not their own remuneration) is added to the founder’s other income and taxed at progressive rates:

Critical note: Under IR, the founder cannot deduct their own salary as an expense — the entire profit is taxed. Under IS, the salary is deductible as an expense to the company, and only the residual profit is corporation-taxed.

For a founder with significant other income (e.g., spouse’s salary), IR can be expensive because the company’s profit stacks on top.

Q5. What is the social security treatment of an EURL?

The founder of an EURL who acts as gérant majoritaire (which is always the case for a sole-associate gérant) is treated as a TNS (Travailleur Non Salarié — non-salaried worker) under the SSI (Sécurité Sociale des Indépendants) regime.

• TNS social charges are approximately 40–45% of the gérant’s remuneration.
• Charges include retirement, healthcare, family allowances, and CSG/CRDS.
• TNS coverage is generally less generous than the assimilated-employee regime (especially for healthcare and retirement points).

A complementary insurance (mutuelle, prévoyance) may be advisable to bridge the coverage gap.

Q6. What is the social security treatment of a SASU?

The president of a SASU is treated as an assimilated employee (“assimilé salarié”) and falls under the régime général (URSSAF, like a salaried employee).

• Assimilated-employee charges are approximately 70–80% of remuneration (employer + employee combined).
• Coverage is more generous — full healthcare, full retirement points, paid sick leave provisions.
• However: if the president takes no salary (e.g., funds the company’s first year from personal savings), there are no charges. This is a critical advantage of SASU for founders who plan to draw nothing for the first year or two.

Q7. So which regime has lower social charges overall?

For most actively-paid founders:

• EURL/TNS: ~40–45% social charges; reduced cover; lower fixed minimum.
• SASU/assimilated employee: ~70–80% social charges; full cover; zero charges if no salary.

The break-even point depends on remuneration level and personal preferences. A founder taking €40,000/year typically pays:

• EURL TNS: ~€16,000–18,000 in social charges.
• SASU assimilated: ~€28,000–32,000 in social charges (employer + employee combined, before tax relief on company side).

But the SASU offers better coverage, and the founder can adjust salary down to zero in low-revenue periods.

Q8. How are dividends taxed?

Dividends from an IS-taxed company (default for SASU; optional for EURL):

• Flat tax (PFU — Prélèvement Forfaitaire Unique) 30%: 12.8% income tax + 17.2% social levies. Default option.
• Or option for progressive income tax at the founder’s marginal rate, with 40% allowance on dividends + 17.2% social levies separately.

For a founder in the 30% income tax band, the PFU at 30% is usually advantageous.

A critical difference for EURL gérants majoritaires under IS: dividends exceeding 10% of the corporate share capital + premiums + current account are subject to TNS social charges (around 40%) instead of social levies at 17.2%. This is not the case for SASU presidents.

This is a major reason why high-dividend founders prefer SASU over EURL even when both are at IS.

Source — CGI art. 200 A (PFU): https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000031775523

Q9. How are minimum social contributions calculated?

EURL TNS gérant: even with zero remuneration, minimum social charges of approximately €1,200–1,500/year apply (cotisations minimales).

SASU assimilated employee: with zero salary, no social charges apply.

This is the practical reason why SASU is often preferred by founders who plan a long ramp-up before drawing any salary.

Q10. What about VAT (TVA)?

VAT regime is the same for EURL and SASU. The choice depends on turnover:

Some companies opt out of franchise even if eligible — typically B2B businesses where customers can reclaim VAT.

Q11. What about CFE and CVAE?

• Cotisation Foncière des Entreprises (CFE) — a local business tax based on rental value of premises. Applies to both EURL and SASU equally. Usually €500–€1,500/year for small businesses.
• Cotisation sur la Valeur Ajoutée des Entreprises (CVAE) — applies only if turnover > €500,000. The rate is being phased down in 2026.

Q12. What are the comparative administrative costs?

Both EURL and SASU have similar formation and ongoing administrative costs:

The SASU produces a bulletin de paie for the president each month even at zero salary — a small additional administrative load compared to the simpler TNS declaration.

Q13. When should a founder choose EURL?

EURL is typically chosen when:

• The founder will draw a regular salary close to or above subsistence level.
• The activity has consistent revenue from year 1.
• The founder accepts TNS coverage gaps.
• IR is preferred (e.g., other personal allowances offset profit).
• Future investors are not anticipated.

Q14. When should a founder choose SASU?

SASU is typically chosen when:

• The founder plans a low-salary or no-salary ramp-up.
• The founder anticipates future investors (a SASU converts cleanly to a SAS with multiple shareholders).
• The founder values full social security cover at the cost of higher charges when paid.
• High dividends are anticipated (no TNS charge on dividends).

Q15. Can I switch from one to the other?

Yes, but it is a transformation under Code de commerce art. L.221-3 et seq., requiring:

• Collective decision (or sole-associate decision).
• Updated statuts.
• New JAL publication.
• New Guichet Unique filing.
• Possible commissaire à la transformation report (auditor opinion on the value of the company).

The transformation is not tax-neutral — it is treated as a cessation of one form and creation of another, triggering immediate tax on accrued reserves. Plan ahead.

Q16. The MmowW Scrib🐮 cell #6 workflow

Cell #6 (FR Company) walks the user through the EURL/SASU decision with a structured questionnaire on remuneration plans, dividend expectations, and investor outlook. Output includes the chosen form’s statuts, the IR/IS election form (where applicable), and a comparative calculator showing first-year tax + social charges under each option.

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Disclaimer

This article provides legal information, not legal advice. MmowW Scrib🐮 is a document preparation service operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not avocats, notaires, or experts-comptables.

Sources

• Code général des impôts art. 206: https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000044979441
• Service-public.fr — corporate tax: https://entreprendre.service-public.fr/vosdroits/F23575
• Service-public.fr — créer une SASU: https://entreprendre.service-public.fr/vosdroits/F32919
• URSSAF — gérant TNS: https://www.urssaf.fr/portail/home/independant.html