Dividend distribution in France: rules, timing and evidence (2026)
Distributing dividends in France in 2026: three legal conditions, a precise AGM calendar, and a revised 31.4% flat tax (PFU, LFSS 2026). Taxation by beneficiary, forms 2777-SD and IFU 2561, evidence to retain.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Quick answer: how do you distribute dividends in France in 2026?#
A dividend distribution is approved by the ordinary general meeting within six months of year-end, paid within nine months, and taxed under the 31.4 % flat tax (12.8 % income tax plus 18.6 % social levies, LFSS 2026). The company files form 2777-SD within 15 days of the end of the payment month.
The distribution of dividends is one of the most consequential decisions in a company's life. It also remains a frequent source of costly errors: premature distributions, overstated distributable profit, poorly anticipated taxation, incomplete documentation. In 2026, the French flat tax (PFU) rises to 31.4 % : no longer 30 % : following the increase in social levies on capital income under LFSS 2026 (Law no. 2025-1403 of 30 December 2025). Securing a distribution requires mastering the legal framework, the calendar, the applicable tax treatment, and the evidence to be retained.
Quick answer: distribute only after the AGM has approved the accounts, verify the actual distributable profit, withhold the 12.8 % advance payment, and file form 2777-SD within 15 days of the end of the month in which the dividend is paid.
What is a dividend distribution and when can dividends be paid?#
Dividends represent the share of net profit that a company decides to return to its partners or shareholders, after approval of the annual accounts. This decision must be made at the ordinary general meeting (AGM) for account approval, which must be held within six months of the financial year-end (Art. L. 232-1 and L. 225-100 of the Commercial Code).
Three cumulative conditions must be met:
- The existence of distributable profit: net profit for the year, reduced by prior losses and mandatory reserves;
- Approval of the accounts by the general meeting;
- A formal resolution to allocate the result, recorded in the minutes.
Without any one of these conditions, the distribution is irregular and may be classified as a fictitious dividend, an offence under Article L. 242-6 of the Commercial Code for joint-stock companies (SA, SAS) or L. 241-3 for SARLs: five years' imprisonment and a 375,000 euro fine for the responsible managers.
The underestimated risk: Some managers confuse available cash with distributable profit. A company may hold cash without having any distributable result : especially when prior losses remain unabsorbed in retained earnings. Distributing in this situation constitutes a fictitious dividend even when the bank account appears to support it.
Distribution calendar in 2026#
The timeline is strictly regulated. Here are the four key steps and their legal basis.
| Step | Deadline | Legal basis |
|---|---|---|
| Year-end close and accounts prepared | Upon year-end | : |
| AGM convened for account approval | Within 6 months of year-end | Art. L. 232-1 and L. 225-100 C. com. |
| Distribution resolution voted at AGM | At the AGM | Art. L. 232-11 C. com. |
| Dividend payment | No later than 9 months after year-end | Art. L. 232-13 C. com. |
Form 2777-SD filing: within 15 days of the end of the month in which dividends are paid (filed by the distributing company).
IFU no. 2561 filing: before 15 February of the following year (annual summary declaration to the tax authorities).
2026 watchpoint#
If dividends are paid after the nine-month deadline, the French tax authorities may treat them as taxable in the year of actual payment rather than the year of the decision : shifting the tax year for the recipients. Unpaid dividends are forfeited to the State after five years.
To avoid missing a filing deadline, keep these three key dates in mind after a distribution.
| Obligation | Deadline | Responsible party |
|---|---|---|
| Request to be exempted from the 12.8 % advance (attestation on honour) | Before 30 November of year N-1 | The receiving shareholder |
| File form 2777-SD and pay the advance plus social levies | The 15th of the month following payment | The distributing company |
| File the IFU no. 2561 (annual summary) | 15 February of the following year | The distributing company |
Dividend taxation in 2026: PFU 31.4 %, progressive scale, and parent-subsidiary regime#
The flat tax (PFU) raised to 31.4 % under LFSS 2026#
From 1 January 2026, the PFU is 31.4 %, broken down as follows:
- 12.8 % income tax (advance payment withheld at source by the distributing company);
- 18.6 % social levies (CSG 10.6 %, CRDS 0.5 %, solidarity levy 7.5 %) : rate increased by Law no. 2025-1403 of 30 December 2025.
This increase results from LFSS 2026, which raised social levies on capital income from 17.2 % to 18.6 %. Factor this into any remuneration modelling before deciding on a distribution.
The progressive income tax option with 40 % allowance#
Individual shareholders may opt for the progressive income tax scale (box 2OP on tax return 2042). In that case:
- Dividends benefit from a 40 % allowance on the gross amount before inclusion in taxable income;
- Deductible CSG (6.8 %) is set off against overall income in the year of payment;
- Social levies of 18.6 % remain due in full.
New for 2026: The option for the progressive scale (box 2OP) becomes retroactively revocable for 2026 income. Taxpayers will be able to switch between the flat tax and progressive scale up to 31 December 2029, providing unprecedented planning flexibility.
Exemption from the 12.8 % advance payment#
The 12.8 % withholding is not mandatory for all taxpayers. An exemption is available where the reference taxable income (revenu fiscal de référence) for the year before last is below:
- 50,000 euros for a single person;
- 75,000 euros for a couple filing jointly.
The exemption request must be submitted to the distributing company by attestation on honour before 30 November of the year preceding payment. Without this, the advance is withheld and reconciled at the annual return.
Summary table: dividend taxation by beneficiary type#
| Beneficiary | Applicable regime | Effective rate |
|---|---|---|
| Individual : PFU (default) | 12.8 % IR + 18.6 % social levies | 31.4 % |
| Individual : progressive scale | 40 % allowance + 18.6 % social levies + marginal IR rate | Varies by bracket |
| Legal entity : parent-subsidiary regime | 95 % exemption, 5 % taxable cost share | ~1.25 % (at IS 25 %) |
| Legal entity : standard regime | Full inclusion in taxable profit | IS 25 % (or 15 % for SMEs) |
Parent-subsidiary regime (Art. 145 and 216 of the French Tax Code): requires holding at least 5 % of the capital for a minimum of two years.
Worked example: 10,000 euros in dividends for an individual shareholder#
Case 1 : Flat tax PFU 31.4 %:
- IR advance 12.8 % = 1,280 euros withheld at source
- Social levies 18.6 % = 1,860 euros
- Total flat tax = 3,140 euros
- Net received = 6,860 euros
Case 2 : Progressive scale option, marginal rate 30 %:
- Taxable base after 40 % allowance = 6,000 euros
- Income tax at 30 % = 1,800 euros
- Social levies 18.6 % = 1,860 euros
- Total = 3,660 euros (before deductible CSG effect in the following year)
In this scenario, the flat tax is more favourable. The progressive scale becomes advantageous for taxpayers whose marginal rate is 11 % or below, or where significant deductible income offsets the dividend. A personalised simulation is essential before each distribution.
Majority SARL managers: the social contributions trap#
For majority managing partners of a SARL (and partners in SNC or EURL), dividends are not exclusively subject to the flat tax. The portion exceeding 10 % of share capital + share premiums + amounts held in current accounts (CCA) is included in the self-employed social contribution base (TNS).
This 10 % threshold is a critical watchpoint. A distribution that appears tax-efficient on paper can generate a significant social contribution reassessment if this ceiling was not factored into the planning. See our detailed analysis of dividends in a SARL.
Evidence to retain to secure a distribution#
In the event of a tax audit, the administration will require a complete, consistent file. The list below covers the essential documents.
Legal documents:
- Minutes of the AGM approving the accounts, including the result allocation resolution;
- Certified annual accounts (balance sheet, income statement, notes);
- Distributable profit calculation schedule (net profit + positive retained earnings − statutory reserves − prior losses).
Tax and financial documents:
- Form 2777-SD filed within 15 days of the end of the month of payment;
- IFU no. 2561 submitted before 15 February of the following year;
- Payment certificate for each partner, with date and amount;
- Proof of bank transfer or cheque issued.
Hayot Expertise note: Retain the full distribution file for at least ten years (the standard tax limitation period). A well-organised file is one that can be read and understood months after the event, with a clear, unambiguous link between the AGM minutes, the accounting calculation, and the bank flows.
Common errors in dividend distributions#
Distributing without actual distributable profit#
Distributable profit is calculated precisely: net profit for the year + positive retained earnings − statutory reserve appropriation − prior losses. Distributing on the basis of an unfinished estimate, or ignoring prior losses, exposes the company to fictitious dividend qualification.
Confusing cash and distributable profit#
A company may show significant accounting profit without holding the corresponding liquidity (assets frozen in investments, delayed client receipts). Distribution planning must be aligned with actual cash flows, not the accounting result alone.
Filing the wrong form or missing the 2777-SD deadline#
The correct form is 2777-SD : not form 2787. It must be filed by the distributing company within 15 days of the end of the month of dividend payment, together with payment of the 12.8 % advance and social levies. Late filing triggers penalties and interest.
Failing to file IFU no. 2561#
The annual summary declaration (IFU 2561) must be sent to the tax authorities before 15 February of the following year. It summarises all distributed income per beneficiary. Omitting it prevents shareholders from declaring their income correctly and exposes the company to sanctions.
Underestimating the social contributions risk for SARL managers#
See the section above on the 10 % threshold. This point is routinely omitted from dividend simulations prepared without specialist advice.
Which article actually penalises fictitious dividends?+
The offence of distributing fictitious dividends (five years' imprisonment and a 375,000 euro fine) falls under Article L. 242-6 of the Commercial Code for joint-stock companies (SA, SAS) and Article L. 241-3 for SARLs. Shareholders acting in bad faith may also be required to repay the sums received.
Can an interim dividend be paid before the AGM?+
Yes. Article L. 232-12 of the Commercial Code allows an interim dividend before the accounts are approved, provided an interim balance sheet certified by a statutory auditor shows sufficient distributable profit. Without a certified balance sheet, the interim dividend is irregular.
Does the advance-payment exemption remove all withholding?+
No. The exemption from the 12.8 % advance (year N-2 reference taxable income below 50,000 euros single, 75,000 euros couple) covers only income tax. The 18.6 % social levies are still withheld at source by the company.
How long should the distribution file be kept?+
Accounting records must be kept for ten years (Art. L. 123-22 of the Commercial Code). The standard tax reassessment period, however, is three years: the supporting file (minutes, distributable-profit calculation, 2777-SD, proof of payment) should remain accessible well beyond the year concerned.
Optimising dividend distribution: trade-offs and planning#
Dividends versus remuneration#
For the manager of a SARL or SAS, choosing between dividends and salary has direct consequences on social protection (pension, health, daily allowances) and the overall cost. Dividends generate no supplementary pension contributions : a consideration that must be integrated into long-term wealth planning. See our detailed comparison dividends vs salary.
Plan the distribution before convening the AGM#
The manager and their accountant should model the distributable amount as soon as the provisional accounts are closed, well before the AGM is convened. This allows the amount to be adjusted according to available cash, investment plans, and each shareholder's personal tax position.
Current accounts (CCA) as a timing tool#
If cash is insufficient at the time of distribution, the company can credit the dividend to the partner's current account. The dividend is legally acquired and taxable from the date of the distribution resolution, but the cash payment is deferred. This technique allows cash flows to be smoothed without forgoing the tax treatment of the dividend.
Holding companies and the parent-subsidiary regime#
For structures operating through a holding company, the parent-subsidiary regime (Art. 145 and 216 of the French Tax Code) allows near-full exemption of dividends passed up to the parent : only a 5 % cost-share remains taxable. This regime requires holding at least 5 % for two years and a retention commitment. See our article on holding company taxation.
How are dividends passed up to a holding company taxed?+
Under the parent-subsidiary regime (Art. 145 and 216 of the Tax Code), a holding company owning at least 5 % of the capital for two years is 95 % exempt: only a 5 % cost share remains subject to corporate tax, an effective cost of around 1.25 % (5 % x 25 %), reduced to 1 % under tax consolidation.
Can a partner's current account defer the cash payment?+
Yes. If cash is short on the distribution date, the dividend can be credited to the partner's current account: it is legally acquired and taxable from the decision date, but the cash outflow is deferred, without changing the dividend's tax treatment.
When do a majority manager's dividends attract TNS contributions?+
For a majority manager of a SARL or EURL, the portion of dividends exceeding 10 % of capital, plus share premiums and the average balance of partner current accounts, is included in the self-employed (TNS) social contribution base (Art. L. 131-6 of the Social Security Code), around 45 % of charges. Model this threshold before any distribution.
Further reading#
- Dividend distribution : general principles and mechanics
- SARL dividends : majority manager specifics and TNS contributions
- Dividends vs salary : quantified comparison for managers
- Holding company taxation : parent-subsidiary regime and dividend upstreaming
- Tax options for individuals 2026 : PFU vs progressive scale, box 2OP
Our support#
We help managers and partners prepare result allocation, build evidential documentation, and model the tax treatment of distributions. Each situation is specific: SARL, SAS, holding company, individual or corporate shareholders, majority or minority manager : we tailor the analysis to your structure and personal tax position.
Secure your dividend distributions
Conclusion#
In 2026, the security of a dividend distribution depends as much on the quality of the evidence retained as on the amount distributed. The flat tax is now 31.4 % (LFSS 2026), the form to file is 2777-SD : not 2787 : and the IFU no. 2561 must be submitted before 15 February. These three points concentrate the most frequent errors seen in practice.
The legal framework is precise, the sanctions for irregularity are severe, and documentation : AGM minutes, distributable profit calculation, 2777-SD, IFU 2561, proof of payment : is what genuinely protects the manager and shareholders in the event of a tax audit.
Current as of 18 July 2026. This article is for information purposes only. It does not replace a personalised review of your situation, documents, and the law as it stands. Dividend taxation depends on your structure, status, and declarative options. Consult a registered expert-comptable before any distribution.
Frequently asked questions
What is the maximum deadline to distribute dividends after the financial year-end?
The ordinary general meeting approving the accounts must be held within six months of the financial year-end (Art. L. 232-1 and L. 225-100 of the Commercial Code). Dividends must then be paid no later than nine months after year-end (Art. L. 232-13). Once that period lapses, unpaid dividends are time-barred after five years: forfeited to the State for shares, but returning to the company for SARL units. If the deadline is missed, the tax authorities may attach the taxation to the year of actual payment.
Can dividends be paid mid-year (interim dividends)?
Yes, under strict conditions. Article L. 232-12 of the Commercial Code permits interim dividends, provided an interim balance sheet shows sufficient distributable profit, certified by a statutory auditor where the company has one. The exemption from the 12.8 % advance is available where the year N-2 reference taxable income is below 50,000 euros (single) or 75,000 euros (couple), on request submitted before 30 November of the previous year. In practice, interim dividends remain uncommon because of the certification constraints.
Are dividends subject to social contributions?
For individuals, dividends bear social levies of 18.6 % (including CSG 10.6 % and CRDS 0.5 %), included in the 31.4 % flat tax (LFSS 2026). For majority managing partners of a SARL, dividends exceeding 10 % of share capital plus share premiums plus amounts in the partner's current account are added to the self-employed (TNS) social contribution base, a major watchpoint in 2026. This 10 % threshold must be modelled before any distribution decision.
What happens if a company distributes dividends without distributable profit?
The distribution is treated as a fictitious dividend, an offence under Article L. 242-6 of the Commercial Code for joint-stock companies (SA, SAS) and L. 241-3 for SARLs. Shareholders acting in bad faith must repay the sums received, and managers face five years' imprisonment and a 375,000 euro fine. The tax authorities may also reclassify the sums as hidden remuneration (Art. 111 of the Tax Code) and apply a 40 % surcharge for deliberate breach. Distributable profit must be calculated precisely: net profit plus positive retained earnings, less the statutory reserve and prior losses.
How do I report dividends received on my personal tax return?
Dividends are reported as investment income (box 2DC of return 2042). Under the 31.4 % flat tax (LFSS 2026), the 12.8 % advance is withheld at source and the 18.6 % social levies are paid by the distributing company. If you opt for the progressive scale (box 2OP), dividends benefit from a 40 % allowance on the gross amount before inclusion in taxable income. New for 2026: this option is revocable until 31 December 2029 for 2026 income.
Flat tax 31.4 % or progressive scale: which is better for dividends in 2026?
The 31.4 % flat tax (12.8 % income tax plus 18.6 % social levies) applies by default. Opting for the progressive scale (box 2OP) unlocks a 40 % allowance and a deductible CSG of 6.8 %, but taxes dividends at your marginal rate. It becomes advantageous when that marginal rate is 11 % or below. Since the 2026 Finance Act (Art. 126), this option is revocable until 31 December 2029 for 2026 income, letting you fine-tune the choice after the fact. A personalised simulation remains essential before each distribution.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants. Certified Pennylane trainer.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
- Entreprendre.service-public.gouv.fr, fiscalité des dividendes perçus par les associés
- impots.gouv.fr — Comment sont imposés les dividendes (PFU)
- Légifrance — Article L. 232-12 Code de commerce (mise en paiement)
- Légifrance — Article L. 242-1 Code de commerce (dividendes fictifs)
- impots.gouv.fr — Formulaire 2777-SD (revenus de capitaux mobiliers, prélèvements à la source)
- Légifrance — LFSS 2026, loi n° 2025-1403 du 30 décembre 2025
This topic is part of our service Company formation in France | SASU, SAS, SARL
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