French Shareholder Loan Account 2026: Deductible Interest Rate, Quarterly Cap & Tax Planning

The compte courant d'associé (shareholder/director loan account — hereafter CCA) is the most widely used internal financing tool in French SMEs and family holding structures. An associate places funds at the company's disposal without heavy formalities; the company repays when cash flow allows. This operational simplicity, however, sits on top of a precise tax mechanism: a quarterly rate cap set by the French tax authority (DGFiP) and two cumulative statutory conditions, the omission of either of which triggers reassessments that can run to several thousand euros.

The 2026 tax environment adds a new dimension to the usual analysis. The flat tax (prélèvement forfaitaire unique — PFU) on dividends was raised to 31.4% with effect from 1 January 2026, subject to final legislative confirmation. This modifies the cost comparison between CCA interest income and dividend distributions for directors calibrating their remuneration mix.

The maximum deductible interest rate on a French CCA for a financial year closing on 31 December 2025 is 4.55%. For years closing during 2026, the cap declines progressively as DGFiP publishes each quarter's reference rate. Two conditions must be met simultaneously: the company's share capital must be fully paid up, and the contractual rate must not exceed the applicable cap. Any excess interest is added back to taxable income.

Deductibility rests on Article 39-1-3° of the Code général des impôts (CGI), supplemented by Article 212 CGI for group situations, and expanded by tax authority guidance published in the BOFiP under reference BOI-BIC-CHG-50-50-30. The principle is that interest paid to shareholders or members on sums left at the company's disposal is deductible from taxable profit up to a cap tied to market lending rates.

The cap equals the annual average of the effective variable-rate lending rates (taux effectifs moyens — TMP) applied by French credit institutions on business loans with an initial term exceeding two years. DGFiP publishes the quarterly TMP figures on impots.gouv.fr. For any twelve-month financial year, the applicable cap is derived from the four quarterly TMP figures covering the year, or from the most recently published figures where the year is not yet complete.

The table below sets out the published caps for financial years closing between late 2025 and mid-2026. The Q1 2026 TMP, published on 27 March 2026, stands at 4.31%.

For a year ending 31 December 2026, the cap will be the arithmetic average of all four 2026 quarterly TMP figures. Only Q1 2026 (4.31%) has been published at the time of writing. The final cap will not be calculable until the Q4 2026 TMP is released. Our current working assumption for planning purposes is a range of approximately 4.20–4.30%, to be confirmed at year-end.

Sources: impots.gouv.fr (page "Taux maximum des intérêts déductibles versés aux associés"), BOFiP BOI-BIC-CHG-50-50-30.

Both conditions must be satisfied simultaneously. Failure to meet either disqualifies all CCA interest — there is no partial allowance.

Condition 1 — Share capital must be fully paid up. If any portion of the share capital remains uncalled or unpaid, no interest on any CCA is deductible, regardless of the rate applied. This absolute rule catches structures where only a fraction of capital was paid in at incorporation and the balance was never called within the five-year statutory window. In practice, we see this situation regularly: a company incorporated with €10,000 capital where only €5,000 was actually deposited, the balance overlooked for years. The associates begin paying CCA interest in good faith, unaware that the deduction is entirely blocked until the capital shortfall is remedied.

Condition 2 — Contractual rate within the quarterly cap. If the agreement specifies a fixed rate of, say, 7%, and the applicable cap falls to 4.37%, the excess (2.63 percentage points) is disallowed. The associate continues to be taxed on all interest received; the company may only deduct the portion within the cap.

Assume an associate maintains a credit CCA balance of €100,000 throughout the 2025 financial year, and the loan agreement specifies a fixed rate of 7% per annum.

1. Contractual interest paid: €100,000 × 7% = €7,000
2. Applicable cap (year-end 31/12/2025): 4.55%
3. Deductible interest: €100,000 × 4.55% = €4,550
4. Amount to add back: €7,000 − €4,550 = €2,450 — this sum is added back to the company's taxable income on Form 2058-A
5. Additional corporate tax cost (IS at 25%): €2,450 × 25% = €612.50 of extra IS for the company
6. Associate's position: the full €7,000 received remains taxable in the shareholder's hands under the PFU flat tax (30%), with no relief for the company's non-deductibility

The outcome is partial double taxation: the associate pays income tax on the full amount; the company pays corporate tax on the disallowed excess. Setting the contractual rate at exactly the cap avoids this inefficiency entirely.

The excess interest is added back as a non-deductible expense on the company's tax reconciliation form (Form 2058-A — Détermination du résultat fiscal), increasing taxable profit without any accounting adjustment. The expense remains in the accounts as posted; only the tax position is corrected.

The add-back does not automatically trigger a requalification as deemed dividends, but the French tax authority may pursue that characterisation under Article 109-1-2° CGI if the conditions for deductibility were not met or if the rate paid reveals an abnormal advantage granted to the associate. During a tax audit, inspectors routinely cross-reference the CCA balance in the statutory accounts with cash movements and then compute the implied rate to compare it against the published cap.

There is no statutory requirement for a written agreement. However, the absence of documentation creates three practical risks:

• Difficulty proving the advance is a loan rather than an undisclosed contribution or disguised withdrawal, particularly in insolvency proceedings or during a shareholder dispute.
• Risk of requalification as an abnormal management act if financial terms are not objectively documented.
• Evidentiary weakness in tax audits, where the inspector may challenge the basis on which the rate was determined.

A well-drafted agreement should state at minimum: the maximum authorised CCA balance, the interest rate or its reference to the statutory cap, the method for calculating interest (annual, quarterly), repayment conditions or blocking period, and duration. It is signed between the associate and the company (represented by its legal officer), dated, and retained in the company's legal files.

On client assignments involving SARL and SAS companies in growth phases, we have repeatedly seen CCAs operating for several years with no documentation. Relations between associates are smooth, so it passes without issue — until a share disposal, a divorce, or an insolvency triggers a dispute in which the absence of a written agreement turns a legitimate receivable into an expensive litigation.

An associate may contractually waive the right to demand repayment of all or part of their CCA for a fixed period — typically two to five years. This "blocked CCA" mechanism carries no special tax treatment: interest remains deductible under the same conditions as an ordinary CCA. Its value is primarily financial and operational:

• Lenders often reclassify a blocked CCA as quasi-equity in their credit analysis, improving the company's apparent leverage ratio.
• It signals associate confidence to financing partners, which is useful when preparing a financing plan or a bank credit application.
• It stabilises the company's short-term cash position without affecting the share capital line on the balance sheet.

The trade-off is straightforward: the associate locks in their receivable. If the company encounters unexpected difficulties during the blocked period, the funds cannot be recalled.

The right choice depends on each director's specific position. The table below offers a comparative framework.

The increase in PFU on dividends from 30% to 31.4% in 2026 (subject to final confirmation) marginally improves the relative attractiveness of CCA interest income for the associate, since interest remains subject to PFU at 30%. The gap is narrow — 1.4 percentage points — but combined with the company-level deductibility of interest (which dividends do not enjoy), the CCA route can generate a measurably better outcome at aggregate level for material amounts. The calculation always depends on the company's IS rate and the director's marginal income tax rate.

For a more detailed analysis of the director remuneration trade-off, see our guide on dividends versus salary and our tax advisory service page.

The thin capitalisation rules in Article 212 CGI apply to interest paid to related companies (as defined for French tax purposes) when the net debt to related parties exceeds 1.5 times equity, when the interest charge exceeds 25% of earnings before interest, tax, depreciation and amortisation, or when the net financial charges exceed €3 million. These rules generally do not apply to CCAs between an individual associate and their company.

However, in holding-subsidiary structures, inter-company advances may fall within Article 212 CGI, and the analysis becomes more complex. Directors managing a group structure should seek tailored advice through our holding tax advisory service.

Interest received by an individual associate on their CCA is taxed as investment income (revenus de capitaux mobiliers). The default regime since 2018 is:

1. 12.8% income tax levy
2. 17.2% social levies
3. Total: 30% PFU (flat tax)

The associate may opt for the progressive income tax scale if their marginal rate is below 12.8%, but this option is global — it applies to all investment income and capital gains for the year. Where the option is exercised, 6.8% of the social levies (the CSG component) is deductible from income in the following year.

For a corporate associate (a holding company subject to IS), interest received is ordinary financial income taxed at the standard IS rate. Unlike dividends, no participation exemption (régime mère-fille) applies to interest payments.

A systematic review before each year-end or half-year close should cover:

1. Confirm full share capital payment — cross-check the Kbis extract and the capital accounts (compte 1011 vs 1012) in the general ledger.
2. Retrieve the applicable rate cap from impots.gouv.fr for the exact year-end date.
3. Calculate the implied rate from interest posted in the accounts and compare it to the cap.
4. Verify the loan agreement — confirm it is signed, dated, specifies the rate and maximum balance, and includes repayment terms.
5. Document the average CCA balance if it fluctuates — the cap applies to actual balances outstanding at each interest accrual date.
6. Calculate and post any add-back on Form 2058-A if required.
7. Run the CCA vs dividend comparison under the new 2026 PFU assumptions before deciding on any distribution.

For broader accounting support, our Paris accountancy practice works with SMEs, SAS and SARL structures across France.

Limitation notice. This article is for general information only. The quarterly rate cap figures shown reflect DGFiP publications available as at 29 May 2026. The rate applicable to your financial year must be confirmed directly on impots.gouv.fr at your year-end date. The reference to a PFU rate of 31.4% on dividends is given subject to final legislative confirmation. The CCA vs dividend arbitrage depends on your personal and corporate tax position and cannot be determined without a review of your specific file. This article does not constitute personalised legal or tax advice and does not replace a formal engagement governed by a signed engagement letter.