France Board Member Fees Guide

the French tax treatment of board member compensation. The guide covers: the jetons de présence (board attendance fees) — the compensation paid to the members of the board of directors (the "conseil d'administration"), the supervisory board (the "conseil de surveillance"), and the board of a SAS; the jetons de présence are deductible for the company (the company can deduct the jetons de présence from the corporate tax as "frais de gestion" — general expenses); the jetons de présence are taxed in the hands of the director as "revenus de capitaux mobiliers" (RCM — investment income), NOT as salary income; the jetons de présence are subject to: (a) the PFU at 30% (12.8% income tax + 17.2% social charges) unless the director opts for the progressive rate, (b) the CRDS at 0.50% (only for French resident directors), (c) the director must file the jetons de présence in the annual tax return (section "revenus de capitaux mobiliers" — form 2561 for the company, form 2042 for the director); the social charges for board members — the jetons de présence are NOT subject to the standard social security contributions (the "cotisations sociales" for employees); the jetons de présence are subject to the CSG and CRDS at 17.2% (the social charges on investment income); the director is NOT covered by the unemployment insurance or the health insurance for the jetons de présence; the tantièmes (profit-sharing bonuses for directors) — the "tantièmes" are the directors' share of the company's profits, distributed by decision of the shareholders' meeting; the tantièmes are subject to the same tax regime as the jetons de présence (taxed as RCM at the PFU rate); the tantièmes are deductible for the company (under the same conditions as the jetons de présence); the management compensation — gérant of SARL — the remuneration of the gérant (manager) of a SARL is taxed as salary income (the "traitements et salaires") if the gérant is a "gérant minoritaire" (a minority gérant — the gérant holds less than 50% of the shares); if the gérant is a "gérant majoritaire" (a majority gérant — the gérant holds more than 50% of the shares), the remuneration is taxed as salary income but the social charges are the SSI (the social security for the self-employed) instead of the employee social security; the president of SAS — the president of a SAS is treated as an "assimilé salarié" (the equivalent of an employee for social charges); the president's compensation is subject to the employee social security regime (the "régime général") — the employer pays the employer social charges (approximately 42% of the gross salary), and the employee pays the employee social charges (approximately 20–25% of the gross salary); the president's compensation is deductible for the company; the deductibility of directors' fees for the company — the company can deduct the jetons de présence and the tantièmes if: (a) they are approved by the shareholders' meeting, (b) they are not excessive relative to the company's size and the market standards, (c) they are not a disguised distribution of profits (the "réintégration" for excessive jetons de présence can be challenged by the DGFiP).

The distinction between the jetons de présence (taxed as investment income) and the management salary (taxed as salary income) is a key aspect of French corporate governance. All amounts in Euros (EUR). For related reading, see our Company Forms Guide → and Social Charges Guide →.

Jetons de Présence vs Salary

Board fees — PFU: The jetons de présence are taxed at the PFU rate of 30% (12.8% income tax + 17.2% social charges). The director can opt for the progressive rate. The company deducts the jetons as a "frais de gestion." The company must provide the form 2561 to the director by 1 February of the following year.
President salary — employee regime: The president of a SAS is an "assimilé salarié" — the compensation is subject to the employee social charges (the employer pays the cotisations patronales at approximately 42% of the gross salary). The president's compensation is taxed as salary income (the 10% deduction applies). The company deducts the full cost (salary + employer charges).

Gérant of SARL — Majority vs Minority

Gérant majoritaire (50%+): The majority gérant is subject to the SSI regime (Sécurité Sociale des Indépendants). The social charges are approximately 45% of the net income. The gérant is not covered by the employee unemployment insurance. The remuneration is taxed as salary income (10% deduction).
Gérant minoritaire (<50%): The minority gérant is subject to the employee regime (régime général). The employer pays the employer charges (approximately 42% of the gross salary). The remuneration is taxed as salary income (10% deduction).

For the social charges on the different types of director compensation, see our Social Charges Guide →. For the corporate tax deductibility of the directors' fees, see our Corporate Tax Guide →.