Lawyers in a SEL: the new BNC regime for compensation

Quick answer. Since the 2024 income year, the compensation a lawyer partner receives for their professional activity within their SEL falls under non-commercial profits (BNC, article 92 of the CGI, form 2035), no longer salaries. Only the compensation for the corporate office remains taxed according to the company form: salaries for a SELAS president, article 62 of the CGI for a SELARL majority manager. Source: French tax doctrine BOI-RES-BNC-000136 of 24 April 2024.

The shift of SEL (société d'exercice libéral) partners' technical compensation into the BNC category is not a mere labelling subtlety: it changes the return to file, the bookkeeping duties, and the way you document your compensation before the tax authority. For a lawyer practising through a SELARL or a SELAS, it is a concrete compliance matter that recurs every year.

At Hayot Expertise, a firm registered with the Ordre des experts-comptables of Île-de-France, we have supported law firms on this reclassification since its first application. This article reviews the rule, its limits, and what it means in practice.

Up to 2023 income, the accepted practice was to report a SEL partner's compensation as salaries (article 62 of the CGI where the office justified it). The administrative doctrine BOI-RES-BNC-000136, published on 24 April 2024 (after an emergency version dated 27 December 2023), settled the matter: from the 2024 income year, compensation received for exercising the professional activity within the company falls under non-commercial profits under article 92 of the CGI.

This position relies on Conseil d'État case law, in particular the decisions of 16 October 2013 (no. 339822) and 8 December 2017 (no. 409429). The core idea: a lawyer who pleads, advises and handles cases carries out a profession by nature, distinct from salaried employment.

We set out the general mechanism in our article on the BNC regime reform for SELARL; here we apply it to the legal profession. For the overall tax framework of the job, see also the lawyer's tax regime in 2026.

Two types of compensation, two regimes#

The decisive distinction lies in the nature of what you receive:

A single lawyer partner may therefore combine all three flows. The boundary between technical compensation and management compensation is not always clear-cut: that is exactly where the practical difficulties concentrate, which we address below.

The BNC reclassification has an express limit in the doctrine: if the activity is carried out under conditions reflecting a relationship of subordination towards the company, the compensation remains taxed as salaries.

For a lawyer, this case is rare but not theoretical. A liberal collaborator is not concerned (they are not a partner). However, a partner whose professional autonomy is heavily framed by the structure could, in borderline situations, fall under salaries. The assessment is made case by case, on concrete indicators (work organisation, instructions, control).

Our reading. For the vast majority of lawyer partners in a SEL, subordination is not established: independence is inherent to the lawyer's status and to professional ethics. The BNC regime is therefore the principle, and the salaried exception must rest on solid evidence, not be claimed for filing convenience.

The shift to BNC triggers a chain of obligations that should not be underestimated.

1. Keeping BNC accounts. The partner must track their receipts (their technical compensation) and any professional expenses under BNC rules. A suitable bookkeeping tool helps: we routinely work with Pennylane or Tiime for the liberal professions.
2. Filing form 2035 for the professional activity, unless the micro-BNC threshold is met (article 102 ter of the CGI), in which case a simplified return suffices. The applicable micro-BNC threshold should be checked on impots.gouv.fr before choosing a regime.
3. Carrying the amount over to the overall income return (forms 2042 and 2042-C-PRO), in the BNC category rather than as salaries.
4. Coordinating with management compensation, which follows its own box where it exists.

Form 2035 and the micro regime are described more broadly in our guide on the special BNC regime and form 2035.

The VAT question: an often misunderstood point#

The partner's internal technical compensation is not subject to VAT. The doctrine BOI-RES-BNC-000136 is clear: the partner acts in the name of the SEL, without an autonomous legal relationship with clients and without bearing the economic risk specific to an independent service. This internal flow is therefore not a taxable supply.

This is a point of vigilance: the BNC tax reclassification does not turn the partner into a provider invoicing the SEL with VAT. VAT continues to apply normally to the fees the SEL invoices its clients, as we explain in our article on VAT and invoicing for lawyers.

The tax reclassification into BNC does not automatically change the social-security base or affiliation. The SEL partner remains a self-employed worker (TNS) or an assimilated employee depending on their office and the company form. The coordination between the tax and social spheres has been the subject of clarifications and lingering questions, and we stay cautious here until the individual situation is examined.

A frequent further point in a SELARL: for a majority manager, the portion of dividends exceeding 10% of the share capital, share premiums and current-account balances may be reintegrated into the TNS social-contribution base (article L131-6 of the CSS). This rule, predating the BNC reclassification, still applies independently and should be anticipated in the compensation / dividend trade-off.

We detail the manager's situation in our article on SELARL manager compensation.

We were recently approached by a lawyer partner in a Paris SELARL who had kept reporting their compensation as salaries on 2024 income, out of habit and for lack of clear information. The structure paid them both for their pleading activity and for their co-management.

The work consisted in separating the two flows: the part tied to the lawyer's activity was reclassified as BNC on a form 2035, the management part kept under article 62. We set up dedicated receipts tracking and revised the overall return. The point was not an immediate gain, but the return's compliance and its consistency with the doctrine in the event of an audit. This type of situation is handled well when addressed in time.

The BNC reclassification does not on its own change the partner's compensation strategy. It fits into a broader trade-off between current compensation and dividend distribution, which we build file by file as part of our compensation versus dividends trade-off engagement.

There is no universal optimal split: it depends on the target income level, the SEL's cash after corporate tax, social-coverage needs and the personal situation. The right reflex is to simulate before fixing anything.

• Do not blur technical activity and office. A single poorly documented "global" payment exposes you to a contestable characterisation. Trace the nature of each payment.
• Micro-BNC regime. It is open to technical compensation below the article 102 ter CGI threshold, but the choice between micro and the actual-return regime must factor in your real expenses. Check the applicable threshold before deciding.
• VAT. No VAT on the internal partner / SEL flow; do not create internal invoicing with VAT out of excess caution.
• Social dimension. Anticipate the 10% rule on dividends in a SELARL with a majority manager (article L131-6 of the CSS).

In practice, the authority's focus is on consistency between the real nature of the activity and the category reported. A lawyer partner's compensation reported entirely as salaries when no subordination is demonstrated may be challenged under the doctrine BOI-RES-BNC-000136. Conversely, a clearly identified management-office portion is meant to stay as salaries or under article 62. The key is documentation: bylaws, minutes setting the management compensation, and separate tracking of the flows.