Legal news

Since 1 September 2025, the individualised rate has become the standard for married couples and registered partners who are taxed jointly.

Details can be found in the article.

What income is subject to withholding tax?

Withholding tax (PAS) applies to almost all income subject to income tax, but with two different collection methods.

Income with direct collection by a third party

Collected directly by the paying institution (employer, pension fund, France Travail, etc.):

– Salaries and wages

– old-age pensions,

– life-long pensions without consideration (e.g. pension paid by a parent to a child),

– replacement income (unemployment benefits, sickness benefits, etc.).

Example

If you receive €2,000 net taxable income per month from your employer, they will deduct the tax directly from your payslip.

Income with advance payments collected by the tax authorities

For certain types of income, there is no intermediary to collect the tax. In this case, the tax authorities collect a monthly or quarterly advance payment from your bank account for the following types of income:

Income from the sale of shares, bonds, etc.

• income from self-employment (liberal professions, traders, craftsmen, farmers, etc.),
• income from real estate (rent received),
• annuities in return for payment,
• certain types of maintenance payments,
• certain specific types of income for managers (see Article 62 of the General Tax Code).

Special cases

• Income from foreign sources that is taxable in France.
• Certain salary income paid by an employer in the European Union or in a country that has signed a tax treaty with France.

How is my tax rate determined?

The tax rate is calculated each year in September based on your tax return from the spring. It takes into account your income and household composition, but not tax deductions/tax credits.

Example

Rokhaya declares a salary of €36,000 in May 2025. In September, the tax authorities apply a personal rate of 7.5% to her. From October onwards, this rate is automatically passed on to her employer.

How is the amount charged each month calculated?

The amount collected corresponds to the taxable income for the month multiplied by the rate applicable to your situation:

How is the amount deducted from my salary calculated?

• for an employee: taxable net income = total net income – special deductions (more information),
• for a self-employed person or landlord: the advance payment is calculated on the basis of the estimated taxable income for the current year and is automatically adjusted if your income changes.

Example

Employee: Julie receives €2,500 in taxable net income per month, and her personal rate is 7.5%. Monthly amount collected = €2,500 × 7.5% = €187.50.

Self-employed: Marc, a craftsman, expects an annual income of €36,000. The tax authorities collect a monthly advance payment of €225 (7.5%), which is automatically adjusted if his income changes.

Good to know

PAS is automatically adjusted to changes in income, but tax deductions and reductions are adjusted the following year.

Can I adjust my rate if my situation changes (income, marital status)?

Yes You can apply for an upward or downward adjustment if your income changes or if your family situation changes (marriage, birth, divorce, etc.). The application is submitted in your personal area and takes effect within a few months.

Example

Jean loses his job in March. His income is cut in half. He reports this change and gets a new reduced rate in May, which lowers his contributions starting in June.

Is the contribution automatic if I don’t change anything?

Yes. If you don’t take any action, the rate calculated in September will apply by default. However, you can choose not to disclose your personal rate to your employer.

In this case, the employer applies a neutral rate calculated solely on the basis of your income and without taking your family situation into account.

What happens if I am in a relationship (married or registered partner)?

Since 1 September 2025, the individual rate has become the standard for married couples or couples in registered partnerships who are taxed jointly.

Each spouse has their own rate, calculated on the basis of their respective income, but the total tax burden for the household remains unchanged.

Example

Julia and Albert, a childless couple, earn €1,600 and €3,500 per month respectively. This gives a taxable net income for the household after a 10% deduction of €55,080 per year and a tax bill of €3,574.

Currently, the household rate of 5.8% applies to both Julia’s and Albert’s income. On their payslips, Julia will have a monthly withholding tax of €93 and Albert €203.

With the individualised rate, which takes into account each person’s income, the rate applied to Julia’s payslip will be 0.4%, corresponding to €6 in withholding tax per month, and 8.3% for Albert, corresponding to €290 in monthly tax, for an unchanged total tax amount (€296 collected each month for the two members of the tax household).

Cabinet Nicolas BRAHIN

Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

Assistante – Traductrice

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

Camilla.nissen.michelis@brahin-avocats.com

www.brahin-avocats.com

The DDADUE 5 Law of April 30, 2025, which came into force on May 3, 2025, adapts the French Monetary and Financial Code to comply with the requirements of the 6th Anti-Money Laundering Directive (Directive EU 2024/1640). It represents a major change by removing direct public access to data on beneficial ownership, in line with the jurisprudence of the Court of Justice of the European Union (Cases C-37/20 and C-601/20, 2022), which struck down the general public disclosure of such data. The law establishes a filtering system, in effect since July 5, 2024, that restricts access based on the status or legitimate interest of the applicant.

Three categories of persons may access the data. First, declaring entities and declared individuals: companies or legal entities that have filed information on beneficial owners have full access to the data they themselves submitted. Individuals designated as beneficial owners also have access to data concerning themselves—this is a new right introduced by the law. Second, competent authorities and persons subject to AML/CFT regulations: unrestricted access is granted to various public authorities involved in the fight against fraud and money laundering, such as Tracfin, judicial authorities, customs, labor inspectors, the High Authority for Transparency in Public Life (HATVP), OLAF, the European Anti-Money Laundering Authority (ALBC), Eurojust, and others, including equivalent authorities from other EU Member States, with some exceptions. Persons subject to AML/CFT obligations under Article L. 561-2 of the Monetary and Financial Code also have full access to the data, provided that they implement a due diligence measure. This right is extended to such persons operating in another EU Member State.

Third, persons with a legitimate interest: a natural or legal person may obtain partial access to the data if they demonstrate a legitimate interest, such as the prevention or fight against fraud or money laundering. Accessible information includes the name, nationality, date of birth, interests held, and, starting in July 2026, the ownership chain. A list of individuals and entities presumed to have a legitimate interest is provided, including journalists, NGOs, academic researchers, members of parliament, public buyers, and foreign authorities. Access requests are submitted to the INPI (National Institute of Industrial Property) or the competent commercial court registry, which will assess whether a legitimate interest exists. In case of refusal, an appeal may be filed with the president of the commercial court, as provided in Article L. 123-6 of the Commercial Code.

Beneficial owners have the right to request the identity of those who have accessed their data, except in two cases. If the access was made by a journalist, researcher, or NGO, only the profession of the requester is disclosed, anonymously. If the access was made by a foreign AML/CFT authority, disclosure may be postponed for investigative reasons.

Cabinet BRAHIN, Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

E-mail : camilla.nissen.michelis@brahin-avocats.com

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

www.brahin-avocats.com

An agreement on future succession is a legal act whose object is rights over an inheritance that has not yet been opened. This inheritance may concern either the contracting party or a third party.

Relaxation of Prohibition

Article 770 of the Civil Code provides that “the option cannot be exercised before the opening of the succession, even by marriage contract.”

Similarly, Article 722 states that “agreements whose purpose is to create rights or to waive rights over all or part of an inheritance not yet opened or an asset depending on it only produce effect in cases where they are authorized by law.”

The Law of June 23, 2006 introduced the family pact, which constitutes a serious exception to the principle prohibiting agreements on future successions.

Criteria for Future Succession Agreement

Jurisprudence has clarified the criteria for agreements on future successions. While most definitions describe such agreements as contractual, case law has sometimes qualified even unilateral acts as prohibited agreements, as seen in Cass. 1st civ., March 17, 1987 (n° 85-16484).

A 1933 ruling used the broad term “stipulation,” and the existence of an agreement on future succession may be established as soon as the convention concerns an element, a share, or the entire un-opened succession (Cass. civ., Nov. 11, 1845).

Such an agreement grants only a potential right, since the succession has not yet opened.

Permitted Conventions

According to Article 722 of the Civil Code, amended by the law of December 3, 2001, only agreements authorized by law can produce effects concerning an unopened inheritance.

Therefore, some mechanisms escape nullity either because they do not constitute true agreements on future succession (such as the post-mortem promise) or because the law permits them as family arrangements.

The Post-Mortem Promise

A person may undertake obligations that will only be executed upon their death.

Thus, agreements that take effect only after death do not fall under the prohibition on agreements concerning future successions, so long as they do not involve transferring the succession itself or any part of it.

For instance, a dowry payable upon death is valid.

According to legal doctrine, the post-mortem promise is valid because the right it confers is actual, with only its enforcement deferred until the death of the promisor. Jurisprudence supports this interpretation, having rejected the prohibition of such promises on the grounds that the beneficiary acquires an “actual pure and simple right,” with enforcement merely postponed until death (Cass. 1st civ., May 30, 1984, n°84-11795; Cass. 1st civ., July 9, 2003, n°00-21163).

Ascendants Partition

The “ascendant’s partition,” also called “gift-partition” or “testamentary partition,” is an act whereby an ascendant distributes all or part of their succession among their descendants, by way of gift or testament.

The ascendant composes the lots themselves and ensures that each lot is at least equal to the reserved portion due to the beneficiaries (Civil Code, art. 1075 et seq.).

Contractual Institutions

Contractual institutions are a form of donation involving future assets, specifically those forming part of a succession.

These have been permitted between spouses since the Civil Code of 1804. Article 1092 of the Civil Code allows such liberalities to be granted in a marriage contract to future spouses. Among spouses, this is known as a “donation to the last survivor.”

Commercial Clause

The commercial clause has been admissible since 1985. Since January 1, 2007, it may provide that the surviving spouse can have the heirs agree to a lease concerning the building where the business is operated (Civil Code, art. 1390, para. 2).

Tontine Clause

The tontine clause, also known as the accretion clause, was long considered by the Court of Cassation as an agreement on future succession.

However, in a ruling on November 27, 1977, confirmed on January 11, 1983 (Cass. 1st civ., Jan. 11, 1983, n°81-13307), the Court recognized the tontine as a conditional (aleatory) contract due to the suspensive condition of the beneficiary’s survival.

Waiver of Action for Reduction

Since the 2006 reform, Article 929 of the Civil Code permits any presumptive forced heir to waive their right to bring an action for reduction in an unopened succession, in favor of one or more specific individuals.

The waiver can cover the entire reserved portion, part of it, or only a specific liberal provision.

Prior to 2006, such a waiver constituted a prohibited agreement on future succession.

Reversibility Clause

The usufruct reversion clause is no longer considered a prohibited agreement on future succession following a decision by the Court of Cassation’s First Civil Chamber on October 21, 1997 (n°95-19759).

Recognition of Debt and Agreements on Future Successions

In a ruling dated October 22, 2014 (n°13-23657), the First Civil Chamber clarified that “a convention that gives rise to an actual pure and simple right for its beneficiary, enforceable against the debtor’s succession,” does not constitute a prohibited agreement on future succession.

Thus, a recognition of debt enforceable only upon death is not considered such an agreement

Med venlig hilsen / Kind regards

Cabinet Nicolas BRAHIN

Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

Assistante – Traductrice

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

Camilla.nissen.michelis@brahin-avocats.com

www.brahin-avocats.com

The judicial appointment of a provisional administrator is an exceptional measure traditionally permitted only when two cumulative conditions are met: the inability of the company to function normally and the existence of an imminent threat to its survival or operations (Cass. com., February 6, 2007, no. 05-19.008). Furthermore, the applicant must demonstrate a legitimate interest, which the courts assess strictly (Cass. com., February 14, 1989, no. 87-13.719). In a recent case (Cass. com., May 7, 2025, no. 23-20.471), two investment companies, acting as creditors of a company managed by their former executive, requested the appointment of a provisional administrator. The court of appeal rejected their request, and an appeal to the Court of Cassation was filed. The Court rejected the appeal, not by disputing whether the substantive conditions were met, but by substituting a new legal basis: “A creditor of a company does not have standing to request the appointment of a provisional administrator.” This ruling introduces a new admissibility condition based not only on legitimate interest but also on the applicant’s legal status.

Until now, case law had suggested that even non-shareholders could initiate such proceedings, provided they had a legal connection with the company (Cass. com., February 16, 1988, no. 86-16.241; Cass. 3e civ., January 17, 2019, no. 17-26.695). Creditors were thus allowed to act, provided they demonstrated legitimate interest and the two substantive conditions were fulfilled. The decision of January 22, 2025, had even reaffirmed this view, stating: “Any person demonstrating a legitimate interest has standing to request the appointment of a provisional administrator” (Cass. com., January 22, 2025, no. 22-20.526).

This new requirement of legal standing, rather than merely a legitimate interest, raises numerous questions. What about bondholders? Do they still have standing despite their special creditor status? What about dismissed directors—can they still request an appointment if they act in the company’s interest? And what about employees, who may also be considered creditors in some cases? Does this decision exclude them from acting? This change effectively transforms what was previously an open action into a restricted one, potentially excluding key stakeholders from corporate governance during times of crisis.

In some situations, the appointment of a provisional administrator is the only effective remedy to overcome deadlock or fraudulent management. By significantly restricting who has standing to request this measure, the Court undermines access to it. A clarification of the applicable regime is now necessary, whether through further case law or legislative intervention. With this decision, the Court of Cassation establishes a new requirement of legal standing, excluding creditors from seeking the appointment of a provisional administrator. This strict position marks a break from earlier case law and raises numerous practical uncertainties, particularly for “atypical” creditors such as bondholders, employees, or dismissed directors. A prompt clarification of the scope of eligible applicants is now urgently needed.

Cabinet BRAHIN, Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

E-mail : camilla.nissen.michelis@brahin-avocats.com

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

www.brahin-avocats.com

When the parties to a share transfer agreement interpret the valuation rules differently, an expert may be appointed to assess the value of the equity interests (such as shares or company units). The expert is not responsible for resolving the legal disagreement between the parties. Instead, the expert may provide several valuations, each corresponding to one party’s interpretation of the agreement, and may base the calculations on different accounting periods if the contractual terms are unclear. This method enables the expert to proceed with their work without delay and to maintain a neutral role. It is the judge’s responsibility to determine the common intention of the parties and to select, among the valuations provided, the one that matches this intention. The judge may not require the expert to choose between two legal interpretations, as that would exceed the expert’s authority.

Cabinet BRAHIN, Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

E-mail : camilla.nissen.michelis@brahin-avocats.com

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

www.brahin-avocats.com

The Court of Cassation recognizes that shareholders have the right to seek compensation for harm suffered by the company, even when the company itself simultaneously initiates legal proceedings against its director (Cass. com., May 7, 2025, No. 23-24.052, No. 252 FS-B). The shareholders’ action (known as an ut singuli action) coexists with the company’s own action (ut universi), and is not conditional upon the company’s inaction.

In a recent case, both a limited liability company (SARL) and one of its shareholders brought simultaneous actions against the same director for the same harmful conduct. The court of appeal rejected the shareholder’s claim, holding that only the company’s legal representative could bring such an action.

The Court of Cassation overturned this decision: the shareholder’s claim is admissible, provided that they have a legitimate interest in the success of their case, in accordance with Article 31 of the Code of Civil Procedure and Article L. 223-22, paragraph 3 of the Commercial Code.

Legal basis:

• Article 31 CPC: legal action is available to any person who can demonstrate a legitimate interest, unless expressly restricted by law.
• Article L. 223-22 of the Commercial Code: shareholders of an SARL may individually or collectively bring a derivative action against the manager.

This combination of provisions supports the recognition of the ut singuli action. Such an action may be exercised prior to, concurrently with, or after the company’s action, based on distinct claims. This coexistence prevents a director from using the company’s (ut universi) action to shield another director from liability or to downplay the seriousness of their own misconduct (Cass. com., May 7, 2025, No. 23-15.931, No. 253 F-B).

Cabinet BRAHIN, Advokatfirma i NICE, Lawyers in NICE

Camilla Nissen MICHELIS

E-mail : camilla.nissen.michelis@brahin-avocats.com

1, Rue Louis Gassin – 06300 NICE (FRANCE)

Tel :   +33 493 830 876      /    Fax : +33 493 181 437

www.brahin-avocats.com