SARL vs SAS: Key Tax Differences in 2024

Choosing between an SARL and an SAS when setting up a business is not just a matter of governance or liability. Taxation plays a crucial role in this decision, as it directly impacts profitability and director remuneration. In 2024, the tax rules applicable to these two legal forms share similarities but also present key differences, particularly regarding profit taxation, social charges, and tax optimisation. This article clearly explains these issues to help you make an informed choice.

1. Profit Taxation: A Common Framework with Nuances

1.1. The Principle of Corporate Tax (IS)

By default, SARLs and SASs are subject to corporate tax (IS). This means that profits generated by the company are taxed at the corporate level, according to a progressive scale:

• 15% for the profit bracket below €42,500 (for SMEs meeting certain conditions).
• 25% for the higher bracket (standard rate in 2024).

This rule applies regardless of the legal form chosen, as confirmed by article 239 bis AB of the French General Tax Code (CGI). Both structures also benefit from the same tax exemption or reduction schemes, such as the Young Innovative Company (JEI) status (see article 44 sexies-0 A of the CGI), subject to eligibility criteria (headcount, turnover, R&D expenditure, etc.).

1.2. The Option for Income Tax (IR): A Key Specificity

Contrary to popular belief, SARLs and SASs can opt for income tax (IR) under certain conditions. This option, governed by article 239 bis AB of the CGI, is reserved for companies that:

• Are not listed on a stock exchange.
• Are held at least 50% by natural persons.
• Are managed at least 34% by partners holding a management role (manager, president, etc.).

This option is particularly advantageous for family-owned SARLs (comprising only direct-line relatives, siblings, spouses, or civil partners), which can opt for IR without any capital ownership conditions, as specified in article 239 bis AA of the CGI. For an SAS, however, this option remains subject to the strict criteria of article 239 bis AB.

Practical Example: A family-owned SARL comprising a father and his two children can choose IR, whereas an SAS in the same configuration must meet the ownership thresholds to benefit.

1.3. Converting an SARL to an SAS: What Are the Tax Implications?

Converting an SARL into an SAS (or vice versa) is a common operation, but it can have tax consequences. According to a ruling by the Court of Cassation dated 18 December 2024, this conversion does not incur additional registration fees if carried out in accordance with the rules (publication of amended articles of association, declaration to the tax authorities, etc.). However, it may affect:

• The tax regime of directors (see section 2).
• Reporting obligations (e.g., an SAS must file its accounts with the registry, unlike certain SARLs).

Key Point: Conversion does not alter the company’s tax regime (IS or IR), unless a specific option is exercised.

2. Director Remuneration: Major Differences

2.1. SARL: The Majority Manager and Social Charges

In an SARL, the majority manager (holding more than 50% of the shares) is considered a self-employed worker (TNS). Their remuneration is subject to social contributions calculated on their professional income, with rates reaching 45 to 50% (depending on the funds). These contributions cover:

• Basic and supplementary retirement.
• Health and maternity insurance.
• Family allowances.
• CSG/CRDS (9.7% in 2024).

Advantage: Contributions are deductible from the SARL’s taxable profit, reducing the IS due.

Disadvantage: The majority manager is not eligible for unemployment benefits.

2.2. SAS: The President as an Employee

In an SAS, the president (or any other designated director) is assimilated to an employee. Their remuneration is subject to the general social security regime, with social contributions shared between the employer (approximately 42%) and the employee (approximately 22%). This regime offers several advantages:

• Access to unemployment benefits (subject to conditions).
• More favourable health coverage (daily sickness benefits).
• Supplementary retirement (AGIRC-ARRCO).

Note: Dividends paid to SAS directors are subject to the 30% flat tax (12.8% income tax + 17.2% social levies), as for SARLs. However, in an SAS, dividends are not subject to social contributions (except for the portion exceeding 10% of the share capital, share premiums, and partners’ current accounts).

2.3. Cost Comparison: A Numerical Example

Consider a director receiving €50,000 in annual remuneration:

Item	SARL (Majority Manager)	SAS (Assimilated Employee President)
Social Contributions	~€22,500 (45%)	~€21,000 (employer) + ~€11,000 (employee)
Net Received by Director	~€27,500	~€39,000 (after employee contributions)
Total Cost to Company	€50,000	~€61,000 (gross salary + employer contributions)

Conclusion: The SAS is more costly for the company but offers better social protection for the director and a higher net income.

3. Tax Optimisation: Specific Levers

3.1. Employee Savings and the Social Levy

Both SARLs and SASs can implement employee savings schemes (PERCO, PEE, profit-sharing), but their taxation differs slightly. According to the collective agreement for the automotive services sector (IDCC 1090), the company’s contribution to the PERCO is:

• Exempt from social contributions (up to 16% of the annual social security ceiling, i.e., €6,952 in 2024).
• Subject to CSG/CRDS (9.7%) and the social levy (20% in 2024).

Key Difference: In an SAS, assimilated employee directors can benefit from these schemes on the same basis as other employees. In an SARL, the majority manager is excluded.

3.2. Dividends: Flat Tax vs Social Contributions

Dividends are taxed in the same way for SARL and SAS partners (30% flat tax), except for the majority manager of an SARL:

• For an SARL: The portion of dividends exceeding 10% of the share capital is subject to TNS social contributions (approximately 45%).
• For an SAS: No social contributions are due on dividends, regardless of the amount.

Example: A majority manager of an SARL receiving €30,000 in dividends will pay social contributions on €20,000 (if the share capital is €100,000), i.e., €9,000 in additional charges. An SAS president will only pay the 30% flat tax (€9,000).

3.3. Tax Incentives for SMEs

Both SARLs and SASs benefit from the same tax incentives for SMEs, such as:

• The Research Tax Credit (CIR): 30% of R&D expenditure up to €100 million, 5% beyond.
• The Innovation Tax Credit (CII): 20% of innovation expenditure (capped at €400,000).
• Exemptions in Urban Free Zones (ZFU).

However, some incentives are reserved for SARLs with fewer than 10 employees (e.g., social contribution exemptions for artisans, as provided by the SDLM collective agreement (IDCC 1404)).

4. Other Tax Differences to Consider

4.1. The Added-Value Contribution (CVAE)

The CVAE is a tax payable by companies with a turnover exceeding €500,000, regardless of their legal form. Its rate varies between 0% and 0.75% of the added value, depending on turnover. SARLs and SASs are subject to the same rules, as specified in the decree of 13 May 2013.

4.2. The Tax on Commercial Surfaces (TASCOM)

This tax applies to companies operating retail sales areas exceeding 400 m², with a turnover above €460,000. Here again, SARLs and SASs are treated identically.

4.3. Reporting Obligations

SASs are subject to more stringent reporting obligations than SARLs:

• Filing of annual accounts with the registry (mandatory for all SASs, including micro-enterprises).
• Publication of a management report for SASs exceeding certain thresholds (turnover > €8 million, balance sheet > €4 million, headcount > 50 employees).

SARLs, on the other hand, benefit from exemptions for small structures (e.g., no management report required for SARLs with fewer than 10 employees).

Frequently Asked Questions

What are the major tax differences between SARL and SAS?

The main differences concern:

• Director remuneration: higher social charges for the majority manager of an SARL (TNS) vs the general regime for the SAS president.
• Dividends: subject to social contributions for the majority manager of an SARL (beyond 10% of share capital), exempt for SAS partners.
• Option for IR: more accessible for family-owned SARLs.

Is one structure more tax-efficient than the other?

No, it depends on your situation:

• For a director seeking optimal social protection (unemployment, retirement), the SAS is more advantageous.
• For a sole trader or family business (with moderate income), the SARL may be more attractive due to the IR option and deductible social contributions.

Can I change the tax regime of my company?

Yes, but under certain conditions:

• Switching from IS to IR: possible for eligible SARLs and SASs (see article 239 bis AB of the CGI), but the option is irrevocable for 5 years.
• Converting an SARL to an SAS (or vice versa): possible without major tax implications, but legal formalities must be observed.

Are dividends taxed the same way in SARLs and SASs?

No. In an SAS, dividends are subject to the 30% flat tax (12.8% income tax + 17.2% social levies). In an SARL, dividends received by the majority manager are subject to TNS social contributions (approximately 45%) on the portion exceeding 10% of the share capital, with the remainder subject to the flat tax.

Are there tax incentives specific to SARLs or SASs?

Tax incentives are generally the same, but some are reserved for SARLs with fewer than 10 employees (e.g., social contribution exemptions for artisans). SASs, however, allow directors to benefit from employee savings schemes (PERCO, PEE), which is not possible for the majority manager of an SARL.