Interest on associate current accounts: 2026 framework

Updated March 2026 - The associate current account is a classic company financing tool. It can provide cash flow flexibility without immediately carrying out a capital increase. But the question of associate current account interest should not be treated lightly. Their rémunération follows a precise tax framework, with a maximum déductible rate and several basic conditions.

See also: Interim dividends, Mother-daughter diet and Tax integration.

The partner current account allows a partner or shareholder to leave sums available to the company. It can be used to:

• temporarily support the cash flow;
• finance a one-off need;
• support a start-up or a growth phase;
• streamline certain intra-group operations or between partners and the company.

No. For current account rémunération to be defensible, it is necessary to verify:

• the existence of an agreement or a clear decision framework;
• the reality of the sums left available;
• rate conformity;
• the correct accounting and tax translation.

The key point of 2026: the deductibility limit#

The BOFiP periodically publishes the référence rate framework used to cap the tax deduction. The version published on January 28, 2026 notably recalls the référence rates usable for financial years ending up to March 30, 2026 inclusive.

For closed twelve-month financial years:

• between December 31, 2025 and January 30, 2026: 4.55%;
• between January 31, 2026 and February 27, 2026: 4.49%;
• between February 28, 2026 and March 30, 2026: 4.44%.

These figures must be used with caution, because the method also depends on the closing date and, depending on the case, the structure of the financial year.

Hayot Expertise Advice: on partners' current accounts, the most common error consists of using a "reasonable" rate without checking the tax déductible rate applicable to the financial year.

• absence of decision or documentation;
• application of a rate that is too high;
• confusion between capital contribution and current account advance;
• approximate accounting;
• absence of overall reading with rémunération and dividends.

The interest-bearing current account may be relevant, but you must also look at:

• the effect on the tax result;
• the cash flow situation;
• the place of associated financing in the overall structure;
• the beneficiary's taxation;
• the available alternatives.

CTA: Check deductibility and the associated financing strategy

Sound management assumes:

• a written framework;
• a review of the movements;
• a check of the applicable rate;
• consistency with other flows between partner and company.

The agreement does not need to be long. It needs to be precise. In practice, the file should let a third party understand why the funds were left with the company, on what terms interest is paid and how the balance will be repaid.

Useful clauses#

• identity of the company and the partner;
• amount left on current account;
• date of availability of funds;
• whether the balance is remunerated or not;
• rate calculation method and payment frequency;
• repayment conditions and possible partial repayments;
• link with the fiscal déductible référence rate for the period.

The year-end review is where many files become fragile. A rate that was acceptable at the beginning of the year may no longer fit the closing date. The finance team should therefore check the rate, the balance and the consistency with other partner flows before accounts are finalized.

A simple year-end checklist#

• the current account balance is still the one that appears in the books;
• the agreed rate matches the applicable déductible ceiling;
• any repayment or new advance has been documented;
• the treatment is consistent with dividends and other rémunération;
• the accounting entries match the legal documentation.

Imagine a company in services that receives a €80,000 advance from its main partner for a few months while waiting for a client payment. If the agreement is written, the déductible ceiling is checked and the repayment path is clear, the mechanism is efficient and transparent. If the same balance remains open for years with no clear plan, the issue is no longer just financing. It becomes a governance and tax risk.

That is why the partner current account should be treated as temporary working capital, not as a substitute for equity.

Once the account current becomes recurring, the question is no longer only whether the rate is déductible. The company should ask whether the advance is still the right tool at all. A capital increase, a shareholder loan with a tighter repayment plan or even a broader cash-flow reset may be more appropriate if the same balance keeps returning year after year.

The signal to watch#

• if the company needs repeated partner advances to operate, the issue is structural;
• if the partner is unsure when repayment will happen, the file is too weak;
• if the accounting team has to explain the same balance every year, the relationship between financing and strategy should be revisited.

In practical terms, the better the file documents the reason for the funding, the less likely it is that the rate discussion will hide a deeper management problem.

Interest from associates' current accounts can be useful, but only in a controlled setting. In 2026, the subject requires a technical reading of the texts, the closing date and the overall financing structure.

Scenario: a partner advances €150,000 to their SARL on March 1, 2026. The SARL's financial year closes on December 31, 2026. The applicable deductibility ceiling for this period is 4.44% (from the BOFiP table for year-ends between February 28 and March 30, 2026 — the closest applicable reference rate is used for the relevant closing date of December 31, 2026).

Note: verify the rate applicable to YOUR specific closing date using the BOFiP reference rate table — the above figure is an example, not advice.

Calculation:

• Period: 10 months (March through December)
• Maximum deductible interest: €150,000 × 4.44% × (10/12) = €5,550
• If the agreement specifies 6%: deductible portion = €5,550; non-deductible = €3,450 (also taxable as interest income for the partner)

Key risk: if no written agreement specifies a rate, the tax administration may recharacterise the entire advance as a capital contribution without interest, denying any deduction AND treating the advances as hidden distributions.

For foreign parent companies lending to French subsidiaries via current accounts:

1. Transfer pricing rules apply when the lender and borrower are related parties (definition: control relationship). The arm's length rate must be documented — not just the BOFiP ceiling rate, which is a French domestic concept.

2. Withholding tax on interest: under the France-US treaty, interest paid from a French entity to a US lender is generally subject to a 0% withholding rate for related-party interest (Article 11 of the treaty). However, the parent must confirm the beneficial ownership and anti-abuse provisions are respected.

3. EBITDA limitation (art. 212 bis CGI): for larger groups, interest deductibility may be capped at 30% of EBITDA or €3M, whichever is higher. This limit applies to ALL financial debt, not just current accounts.

4. Thin capitalisation risk: if the advance is very large relative to equity, the tax administration may challenge its classification and apply the non-deductibility rules if debt greatly exceeds the arm's length level.

Recommendation for international groups: document the cross-border current account as a formal intercompany loan agreement, not merely a French compte courant d'associé. The agreement should specify purpose, repayment terms, and the arm's length rate analysis, in addition to the French BOFiP ceiling compliance check.

(Official sources: BOFiP BOI-BIC-CHG-50-50-30 of January 28, 2026, articles 39, 212 and 212 bis of the CGI)

This English section is written for international readers who need to apply the French guidance to a real management decision. The key point for interest on French shareholder current accounts is not to memorise every technical rule, but to connect the rule to documents, deadlines, cash impact and governance. For shareholders financing their company through current-account advances, the right approach is to identify the decision to be made, collect reliable evidence, and only then choose the accounting, tax, payroll or legal treatment.

The practical decision is whether interest should be paid, capitalised or waived after checking deductibility and cash impact. That decision should be documented before the year-end close, financing discussion, payroll run, transaction signing or tax filing concerned by the topic. When the matter is material, the file should include who decided, which assumptions were used, and which professional advice was obtained.

Evidence to keep#

• shareholder current-account balance;
• interest calculation;
• cash forecast;
• tax deductibility support;
• approval record;

The tax-deductible rate and the company's capacity to pay must be checked before interest is booked mechanically. A clean file also helps the company answer questions from banks, investors, auditors, tax authorities, employees or buyers. It is usually cheaper to prepare that evidence during the process than to reconstruct it after a dispute, audit or urgent financing request.