Taxation of partnership profits - Company department

Payroll tax: what happens to the share of partnership profits?

The share of partnership profits, which is treated in the same way as dividends distributed by capital companies, must be included in the numerator of the payroll tax liability ratio.

The Conseil d’Etat refuses to allow the appeal against the decision of the Versailles Administrative Court of Appeal, which ruled that the share of profits of partnerships must be treated in the same way as dividends distributed by capital companies and, consequently, that this share must, for the application of the provisions of article 231 of the CGI, be included in the numerator of the ratio provided for in this article (CAA Versailles 20-10-2020 n° 18VE03966 and 18VE03967).

The dispute concerned the inclusion of the quotas that a real estate development holding company carrying out real estate programs through transparent construction-sales companies governed by the partnership regime received from the profits made by the latter in the calculation of its payroll tax liability ratio.

The Conseil d’Etat upheld the solution adopted by the Versailles Administrative Court of Appeal, which had ruled that these shares in the profits corresponded to financial income earned by the holding company owning shares in these non-trading companies, and that they could not be treated as income from a taxable activity, on the grounds that these subsidiaries were transparent and carried on an economic activity subject to VAT. The Court thus concluded that these shares should be included in the numerator of the taxable income ratio, transposing to the present dispute the reasoning followed for dividends paid by a capital company to its subsidiaries (CE 29-6-2001 no. 176105) or received by a holding company interfering in the management of its subsidiaries (CE 14-2-2018 no. 410302: see La Quotidienne of February 23, 2018).

Source (09/11/2021) : https://www.efl.fr/actualite/taxe-salaires-sort-quote-part-benefices-societes-personnes_fbdee33b9-dddb-4725-8dc2-bcb693745e81