French Holding Company Tax Advice | French Corporate Tax Optimisation

French Holding Company Tax Planning - Hayot Expertise#

Setting up a holding company (société holding) is one of the most powerful tools available to a French business owner for tax optimisation and wealth structuring. By grouping your shareholdings into a parent company, you unlock exceptional tax mechanisms: near-total exemption on inter-company dividends, cross-entity loss offsetting, leveraged acquisition financing and optimised succession planning. Hayot Expertise, based in Paris 8, guides you from the initial feasibility study through to the day-to-day management of your holding structure.

When your holding owns at least 5% of a subsidiary's capital for more than two years, the parent-subsidiary regime applies automatically:

• Dividends paid by the subsidiary to the holding are 95% exempt from French corporate tax (IS)
• Only a 5% add-back for costs and charges is included in the holding's taxable income
• Effective tax on those dividends is therefore 1.25% (5% × 25% IS rate) — near-total exemption
• Comparison: an individual receiving the same dividends directly would pay the 31.4% flat tax (12.8% income tax + 18.6% social charges, LFSS 2026)

Example: your subsidiary earns €200,000 profit after tax and pays €150,000 in dividends to your holding. Tax at the holding level: €150,000 × 5% × 25% = €1,875, versus €47,100 if you had received the dividend personally (31.4% flat tax). Saving: €45,225.

Read more: Everything you need to know about tax optimisation via a holding company

When the holding owns 95% or more of its subsidiaries' capital, it can elect for the tax consolidation regime (intégration fiscale):

• Profits and losses of all group entities are consolidated into a single IS return
• A loss-making subsidiary directly reduces the group's consolidated taxable profit
• The group benefits from the reduced 15% IS rate on the first €100,000 of consolidated profit (subject to conditions on paid-up capital and majority individual ownership)
• One consolidated 2065 return simplifies all filing obligations

There are two types of holding company with different tax treatments:

Active holding (holding animatrice)#

Actively involved in subsidiary management through service agreements, strategic direction and intra-group loans. Tax advantages:

• Eligible for the Dutreil transmission exemption (75% abatement on business transfers)
• Partial VAT recovery on head-office costs
• Lower risk of reclassification by the tax authority

Passive holding#

A pure holding structure with no involvement in subsidiary management. Simpler but fewer benefits: no VAT recovery on costs, ineligible for Dutreil in most cases.

Our recommendation: systematically prefer the active holding structure, which offers significantly stronger legal and tax protection.

Founder of a SASU#

You currently extract profits as dividends taxed at 31.4%. By creating a SAS holding above your SASU:

1. The SASU pays dividends up to the holding (1.25% effective tax)
2. The holding accumulates cash to fund the next acquisition or property investment
3. You draw from the holding only what you personally need, at the 31.4% flat tax

Multi-site property investor#

A holding that owns several IS-registered SCIs allows you to:

• Finance a new property acquisition using dividends already sitting in the holding (no tax extraction)
• Deduct interest on holding-level debt used to finance subsidiary acquisitions
• Progressively transfer shares in the holding to children via gifts

External growth (LBO)#

The holding takes out a bank loan to acquire a target company. Dividends from the target flow up to the holding (parent-subsidiary regime, near tax-free) and service the loan repayments. This is the core mechanics of a leveraged buyout.

1. Free feasibility study: comparative simulation with and without holding
2. Legal structuring: choice of legal form (SAS, SASU), articles of association, share contribution (Article 150-0 B ter CGI)
3. Incorporation and registration: INPI single window, legal notice, bank account opening
4. Intercompany agreements: cash pooling agreement, management services agreement, management fee contracts
5. Accounting and tax filings: two companies managed in a coordinated way
6. Annual review: adapting the structure to legislative and personal wealth changes

See our full accounting packages and legal services on our pricing page.