The manager’s remuneration constitutes a deductible charge from the company’s taxable income, in the same way as the bonuses paid to staff, and this is also the case for the related social charges. The manager therefore has the possibility of reducing corporate tax while maximizing his income or rewarding his employees.
The payment to the manager of remuneration higher than what was initially planned or of a bonus to the personnel, when the result of the current financial year allows it, can reduce the amount of the taxable profit. Social security charges on these supplements are also deductible from taxable income.
In return, the company will pay more social charges.
Take out additional insurance contracts on behalf of the company
The manager can also decide to take out additional insurance contracts, paid for by the company, to improve his social protection according to his own needs (retirement, provident insurance, etc.).
The premiums paid by the company may be deducted from the taxable tax result up to a certain limit. The company’s accountant or the mandated insurer can calculate the maximum amount deductible under these contracts.
Remunerate advances in partner’s current account
Advances made by partners to the company through their partner’s current account may be remunerated by interest deductible from taxable income within certain limits set by the tax administration.
Thus, the taxable result is reduced by an amount equal to the interest paid admitted as a deduction and the partners receive additional income. The use of the tax calculator is important there.
Charge tax loss carry forwards against profit
When the company has experienced loss-making years, it normally has a stock of deficit which can be carried forward to future profits of the company. These losses constitute, when carried forward, charges deductible from taxable profit.
The carry forward of losses is capped at 1 million euros per year, increased by 50% of the portion of the profit above this limit.
To benefit from it, a carry forward of accumulated tax losses must be made directly on the tax return.
Using corporate tax credits and reductions
It is also possible to reduce corporate tax with tax credits and reductions. These tax arrangements are deducted directly from the amount of corporation tax calculated.
Perfect knowledge of taxation is necessary for an optimized use of the many existing systems. It is therefore important to be accompanied by your accountant on this issue.
Here are some existing devices:
- The research tax credit,
- The innovation tax credit,
- The competitiveness employment tax credit,
- The apprenticeship tax credit,
- The tax credit for commercial prospecting expenses,
- Tax reduction on sponsorship expenses.
Develop by setting up in assisted areas
Finally, the optimization of the taxation of profits made by the company can also be achieved by setting up new establishments within assisted areas , where it will be possible to benefit from a reduction or exemption from tax on benefits subject to fulfilling all conditions.