SASU Income Tax and CSG: Authorities Contradicted by Own Guidance

I. Published Guidance: The Shareholder "Carrying on an Activity Within the Company"

A. What the Official Tax Bulletin Says About the Election Regime

BOI-IS-CHAMP-20-20-20-20 comments on the terms and consequences of the election under Article 239 bis AB of the French Tax Code (Code général des impôts, CGI). Published on 25 March 2014, it remains in force and has never been withdrawn¹⁶. Its paragraph 160 states that the share of results accruing to an individual partner "is taxable in the category of industrial and commercial profits (BIC), non-commercial profits (BNC) or agricultural profits (BA), professional or non-professional, depending on whether or not the partner carries on a professional activity within the company that has made the election". The criterion for the category is the partner's exercise of an activity, and it is the administration that writes so.

Paragraph 260 goes further: it expressly addresses social levies. "Two situations must be distinguished." In the first, "where the partner's share derives from an activity falling within the BIC, BNC or BA category carried on professionally, the income is subject to the generalised social contribution (CSG) at the rate of 7.5%", that is, in 2014, the CSG rate on earned income, "and to the contribution for the repayment of social debt (CRDS) at the rate of 0.5%". In the second, "where the partner's share derives from an activity falling within the BIC, BNC or BA category carried on non-professionally, the income, assimilated to investment income", bears CSG at the rate specific to such income together with the additional levies. The rates quoted are those of 2014; the dividing rule has not moved. Twelve years ago, the administration therefore published the exact solution to the present dispute: the share of the partner who carries on the activity falls within the levies on earned income, that of the passive partner within investment income. It has never written otherwise.

Paragraph 170 of the same document adds, regarding "the remuneration of partners carrying on an activity within the company", that it "does not constitute a deductible expense of the company but is added back to the company's profit for the purposes of the tax personally due by each partner in the income category corresponding to the company's activity". BOI-RSA-GER-10-30, in its version of 16 July 2025, repeats that sentence word for word at its paragraph 400¹. The 2025 guidance confirms that of 2014.

Three assertions are contained in that sentence, common to both documents. The administration describes the partner as a person "carrying on an activity within the company": it does not see him as a passive holder of shares. It acknowledges that this partner has a "remuneration", that is, a counterpart for his work. And it indicates that this remuneration is not separated from the profit but "added back" to it, to be taxed in "the category corresponding to the company's activity", non-commercial profits or industrial and commercial profits as the case may be.

The mechanism thus described is that of every partnership regime. The professional who operates through an entity falling under Article 8 of the CGI does not pay himself a salary in the tax sense: the remuneration for his work is embedded in the profit he declares. That is why Article 151 nonies of the same code treats his rights in the company as assets allocated to the exercise of the profession². The absence of separate remuneration is not evidence of inactivity; it is the legal consequence of the regime, and the guidance says so.

B. Guidance Binding on the Administration

The second paragraph of Article L. 80 A of the French Tax Procedures Code (Livre des procédures fiscales, LPF) prohibits the administration from making an adjustment by relying on an interpretation different from the one it has made known through its published instructions or circulars and had not withdrawn at the date of the transactions concerned³. The guarantee does not depend on the goodwill of the audit service: a taxpayer who has complied with published guidance is protected against an adjustment based on a contrary reading.

BOI-IS-CHAMP-20-20-20-20 and BOI-RSA-GER-10-30 are published instructions within the meaning of that provision. The first has been in force since 2014, the second in its version of 16 July 2025, and neither has been withdrawn. The age of published guidance is not a ground of non-binding effect: an instruction remains binding as long as it has not been formally withdrawn, and that is precisely what the second paragraph of Article L. 80 A requires to be verified. Both documents concern the interpretation of the tax regime of the election under Article 239 bis AB, on which the income category of the profit directly depends, and the first expressly takes a position on the social levies attached to it. And it is that category, and the nature of activity that governs it, that Article L. 136-6(I)(f) of the French Social Security Code (Code de la sécurité sociale, CSS) takes as its reference when it covers income "within the meaning of the French Tax Code", excepting income subject to the earned income contribution⁴. The investment income contribution is itself assessed, audited and collected under the rules applicable to income tax, by the same administration, as the ministerial answer of 2 June 2026 expressly recalls.

The taxpayer is therefore entitled to hold against the service that reassesses him the description the administration itself gives of his situation: that of a partner who carries on an activity and whose profit is the counterpart of that activity. The administration cannot, within the same procedure, maintain in its guidance that the partner carries on the activity and maintain in its reassessment notice that the same partner receives income from the passive holding of his capital.

C. The Consequence the Audit Services Refuse to Draw

Reassessment notices rest on a chain of reasoning that published guidance breaks at its first link. The director draws no remuneration, therefore he is affiliated with no scheme in respect of his activity, therefore his profits do not fall within the earned income contribution, therefore they fall within the investment income contribution. If, as paragraph 400 says, the remuneration of the working partner is by construction included in the profit taxed in his hands, the premise "he draws no remuneration" is false. The partner is remunerated: by the profit. What the guidance describes is not a partner without remuneration, it is a partner whose remuneration is not deductible.

The Conseil d'État has moreover held, in a decision of 30 December 2021 reported in the tables, that income derived from a self-employed activity carried on professionally falls within the earned income contribution, regardless of affiliation or contributions, and that subjecting it to the investment income contribution misapplies the scope of the tax statute⁵. We explained in a previous article why that ground is a matter of public policy. Published guidance supplies its factual counterpart here: the administration has itself written that the partner carries on the activity.

II. The Ministerial Answer of 2 June 2026: A Position Without an Accessible Basis

A. Binary Reasoning Incompatible With the Case Law

Asked by a written question from Ms Anne Bergantz, Member of Parliament for the Yvelines, about the exact legal basis of the reassessments and the desirability of clarification, the Minister of the Economy answered in the Official Journal of 2 June 2026. The answer proposes no clarification. It sets out a two-step reasoning, which we quote so as not to distort it⁶.

First step, the principle: if the profits accruing to the sole shareholder of the SASU do not fall within the material scope of the social contributions on earned income, "they necessarily fall within the material scope of the social levies on investment income". Second step, the criterion: SASU directors "who are not remunerated in respect of that activity as director do not fall within the social protection scheme of assimilated employees, nor within the scheme of non-salaried workers. Consequently, the entire profit of the SASU taxable in their own name under income tax is liable to the social levies on investment income".

The first step is accurate in its letter and inaccurate in its use. It is true that Article L. 136-6(I)(f) is drafted as a sweep-up clause for categorical income with an exception. But the question is not what happens "if" the profits do not fall within the scope of the earned income contribution; it is whether they do. The Conseil d'État answers it by the criterion of the professional exercise of the activity, assessed by reference to the nature and repetition of the services. The ministerial answer never examines that criterion. It moves directly from the absence of affiliation to attachment to investment income, which is exactly the reasoning by elimination that the decision of 30 December 2021 rejects, since the taxpayer who obtained discharge there was himself neither affiliated nor contributing⁵.

B. A 2002 Circular That No One Can Read

The second step of the reasoning is more fragile still. To assert that the affiliation of SAS presidents with the general scheme, provided for by Article L. 311-3(23) of the CSS, concerns only those who receive remuneration, the ministerial answer cites neither the statute, nor a decree, nor a court decision. It cites "a circular No. 2002-004 of 30 January 2002" of Organic, the former pension fund for traders, which disappeared in 2006 through its merger into the Régime social des indépendants, itself abolished in 2018⁶.

We have searched for that text. It appears neither on Légifrance, nor on the URSSAF website, nor in the Official Social Security Bulletin, nor in the documentary databases accessible to the public. At the date of publication of this article, its only trace online is the ministerial answer itself and the commentaries that repeat it. The reassessed taxpayer is thus confronted with a criterion whose source he cannot read, and whose exact content, scope and reach he cannot verify.

The law draws a consequence from that situation. Article L. 312-2 of the French Code of Relations between the Public and the Administration (CRPA) requires the publication of instructions and circulars containing an interpretation of positive law, and provides that they "are deemed repealed if they have not been published", under conditions set by decree⁷. A twenty-four-year-old circular of a social security body, never published, is not a norm that can be held against a taxpayer in 2026. It is, at best, an indication of what a now-defunct body thought of its own affiliation practice.

A taxpayer who receives a reassessment notice relying on that circular, directly or through the ministerial answer, is entitled to request its disclosure from the service under the right of access to administrative documents and, failing production, to have it recorded that the criterion invoked has no verifiable support. The Social Security Directorate itself reminded the funds, Organic included, by a circular of the very same 30 January 2002, that their instructions and circulars containing an interpretation of positive law are administrative documents that must be disclosed to any person who requests them⁷.

C. A Criterion That Adds to the Statute, Carried by a Text Without Its Force

Even supposing the circular were found and its content matched what the answer says of it, it would merely state an affiliation rule: the SAS president is affiliated with the general scheme only in respect of the remuneration he receives. That rule, which follows from Article L. 311-3(23), is not disputed. It says when the president is affiliated. It says nothing about the nature of the company profits taxed in the hands of the shareholder, a question governed by Articles L. 136-1 et seq. and the CGI categories to which they refer⁸. Moving from "not affiliated for want of remuneration" to "investment profit" presupposes a rule that neither the statute nor the circular contains.

One must finally recall what a ministerial answer is. It is a position taken by the executive on a question from a member of parliament. Where it contains a favourable interpretation of a tax provision, the taxpayer may rely on it under Article L. 80 A of the LPF, like any published guidance. Where it is unfavourable to him, it is not binding on him: the guarantee of Article L. 80 A operates in one direction only, and the tax court is bound only by the statute, whose interpretation it controls. The answer of 2 June 2026 therefore added no law; it publicly recorded the position the administration was already defending, and revealed its foundation. It is precisely that foundation that does not hold.

The Conseil d'État has just so held in the clearest terms. In a decision of 16 July 2026, reported in the tables, it recalls that "answers given by ministers to written questions from members of parliament do not constitute acts capable of being challenged before the courts", save where they contain an interpretation of the tax statute binding on the administration under Article L. 80 A, and it holds that an answer imposing on taxpayers obligations that "do not derive" from the statutory provisions "contains an interpretation of the law unfavourable to the taxpayers concerned", devoid of any binding effect¹⁷. Transposed to the answer of 2 June 2026, that framework leads to a simple finding: insofar as it subjects the partner's profit to a levy the statute does not provide for him, the answer is unfavourable, hence not binding on the taxpayer, and adds nothing to the law the tax court must apply.

III. The Genesis of the 2024 Reform: Stated Objective and Blind Spot

A. What the Government Said It Wanted to Do

Article 18 of the Social Security Financing Act for 2024 reformed the base of social security contributions and levies of self-employed workers⁹. The measure was not in the bill as tabled. It was introduced by a Government amendment, No. 3313, tabled on 25 October 2023, whose explanatory statement deserves to be read for what it says about the executive's intentions¹⁰.

The objective is stated plainly: to reform the bases of contributions and levies "in order to strengthen the equity of their social levies with employees and to increase their pension rights". The diagnosis is that of an imbalance between two bases, one for contributions that open rights, the other for CSG and CRDS that do not: the base on which social rights are calculated "is therefore under-calibrated, while the CSG-CRDS base appears, conversely, over-calibrated". The reform is meant to correct that imbalance through a single base, and the statement announces that "overall, this new calculation of the base will result in a reduction of social levies", offset by a strengthening of the contributions allocated to basic pension and health insurance.

The Government confirmed that reading after the Act was passed. The annex on the implementation of the 2024 Social Security Financing Act presents the measure as intended "to improve the pension rights of self-employed workers without increasing their social levies", by "correcting an over-weighting of the generalised social contribution (CSG), which does not directly open social rights"¹¹. The intention is thus constant and documented: less CSG, which gives nothing, more contributions, which open rights, for all self-employed workers.

B. A Reform Adopted Without Debate in the National Assembly

The path of the text explains why the case of capital companies under income tax was never raised. The Government engaged its responsibility, under the third paragraph of Article 49 of the Constitution, on the second part of the financing bill, the revenue part, in which the amendment sat. A motion of no confidence was tabled on 25 October 2023, the very day the amendment was tabled, and rejected¹². Amendment No. 3313 still bears today, in the National Assembly's amendment database, the status "under processing": it was never debated or voted on by deputies; it was incorporated into the text on which the Government engaged its responsibility.

The Senate examined the measure, which had become Article 10 ter of the bill, and deletion amendments were tabled by senators who denounced the absence of an impact study and of consultation¹³. But the debate concerned the allowance, the "super-gross" income and the liberal professions that stood to lose. At no point was the situation of the shareholder of a SAS that has elected under Article 239 bis AB addressed. There is therefore not the slightest indication in the preparatory works that the legislature intended to exclude that shareholder from the scheme designed for all self-employed workers, nor that it intended to subject him, alone, to a wholly non-contributory levy.

C. The Blind Spot: The Only Self-Employed Worker Refused Everything by the State

Let us now bring the State's three voices together. The ministerial answer of 2 June 2026 tells the president of a SASU under income tax that he falls within no scheme: not an assimilated employee for want of remuneration, not a non-salaried worker for want of status. No body affiliates him, no contribution is called from him, no right opens. The same answer infers that his entire profit bears the levies on investment income: CSG at 9.2% then 10.6%, CRDS at 0.5%, solidarity levy at 7.5%, that is 17.2% then 18.6%. Yet these three levies are taxes, not contributions: they open no right to a pension, to daily allowances or to anything else¹⁴.

The result is exactly the reverse of the objective the Government assigned to the 2024 reform. Where the legislature wanted, for self-employed workers, to reduce the share of CSG "which does not directly open social rights" in favour of contributory payments, the administration constructs, for the president of a SASU under income tax alone, a levy that is 100% non-contributory, at a rate almost double that of the earned income contribution, with no possibility of contributing to anything. He is the only worker personally carrying on a professional activity to whom the State refuses both affiliation and the rate that goes with it.

This situation is not merely inequitable, which would not be a legal ground. It is legally significant in two respects. First, because the legislature's intention is an element of statutory interpretation: where the text of Article L. 136-3 of the CSS covers the professional income of self-employed workers, including where the activity is carried on through a company falling under Article 8 of the CGI, and where its author declared an intention to improve the rights of all self-employed workers, that text cannot be read as excluding the one among them who operates through a transparent SAS⁸. Second, because the administration cannot rely on a legislative intention it inverts. It invokes the 2024 regime to tax the absence of affiliation; the 2024 regime was intended to reduce non-contributory CSG. One cannot derive from a reform made to confer rights a levy that confers none.

The Cour de cassation has moreover held, under the earlier texts, that the share of profits allocated to the working partner of a pass-through entity constitutes self-employed professional income falling within the base of contributions and levies, "irrespective of the tax rules governing the allocation of taxable profit among partners"¹⁵. The civil courts, guardians of the contribution base, never thought that the partner of a transparent company could be anything other than a professional. It is the tax court that is now invited, by the tax administration, to treat him as a rentier.