Do all companies at IS benefit from the 15% reduced rate?

No, only those meeting the three cumulative conditions: turnover below €10M, capital held at least 75% by individuals, and capital fully paid up. A SASU or EURL owned by its founder generally meets them.

Does the 25% rate apply to the whole profit if I exceed €42,500?

No. Only the profit slice above €42,500 is taxed at 25%; the first €42,500 remain taxed at 15%.

Is the €42,500 threshold the same every year?

The threshold is set by the loi de finances and can be revised; always use the amount in force for the relevant fiscal year and check it with your expert-comptable.

How does the reduced IS rate influence the remuneration/dividend choice?

By reducing taxable profit through deductible remuneration, a company can stay under the €42,500 threshold and pay 15% instead of 25% on a larger share of its result, increasing the net profit available for dividends.

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Dividends & reserves6 min read

Corporate tax at 15% up to €42,500: how to benefit in 2026

Published July 20, 2026

A company subject to corporate tax does not automatically pay 25% on its profit: a reduced rate of 15% applies to the first slice of profit, under conditions. Understanding this reduced rate — and how it interacts with dividend taxation — matters for any SASU or EURL at IS in 2026.

The 15% reduced rate, and its conditions

Corporate tax (impôt sur les sociétés, IS) applies a reduced 15% rate on profits up to €42,500, under three cumulative conditions: turnover below €10M, share capital held at least 75% by individuals, and capital that is fully paid up. Beyond €42,500 of profit, the standard 25% rate applies to the excess.

A tiered calculation, not a single rate

The reduced rate only applies to the first slice of profit: the first €42,500 are taxed at 15%, and anything above that threshold is taxed at 25%. For a company with €60,000 of taxable profit, for example, €42,500 is taxed at 15% and the remaining €17,500 at 25% — not the entire profit at 25%.

15% on the profit slice up to €42,500
25% on the profit slice above €42,500
Conditions: turnover < €10M, capital held at least 75% by individuals, capital fully paid up
Applies to SASU and EURL at IS that meet these conditions

The interaction with dividend taxation

The reduced IS rate acts upstream of dividend distribution: the lower the IS paid, the higher the net profit available for a distribution. Dividends distributed afterwards are taxed at the flat tax (PFU) of 31.4% (12.8% income tax + 18.6% social levies). Staying under the €42,500 taxable profit threshold — for example by calibrating the owner’s remuneration, which is deductible from IS — therefore maximises the net profit available before even arbitrating between remuneration and dividends.

Why this threshold matters to your strategy

For a company with profit near €42,500, additional remuneration for the owner, deductible from IS, can bring the entire profit back under the reduced 15% rate rather than leaving part of it taxed at 25%. This is one of the levers in the remuneration-versus-dividends arbitrage: the applicable IS rate depends directly on the profit level remaining after remuneration.

Frequently asked

Do all companies at IS benefit from the 15% reduced rate?: No, only those meeting the three cumulative conditions: turnover below €10M, capital held at least 75% by individuals, and capital fully paid up. A SASU or EURL owned by its founder generally meets them.
Does the 25% rate apply to the whole profit if I exceed €42,500?: No. Only the profit slice above €42,500 is taxed at 25%; the first €42,500 remain taxed at 15%.
Is the €42,500 threshold the same every year?: The threshold is set by the loi de finances and can be revised; always use the amount in force for the relevant fiscal year and check it with your expert-comptable.
How does the reduced IS rate influence the remuneration/dividend choice?: By reducing taxable profit through deductible remuneration, a company can stay under the €42,500 threshold and pay 15% instead of 25% on a larger share of its result, increasing the net profit available for dividends.

This article is general information for a one-person company (SASU/EURL or micro-entreprise), not tax advice. Rules and figures change — confirm your situation with your accountant before acting.