Professional practice company: details on social contributions deducted on dividend paid by a SEL to a SPFPL.

In October 2023, a ruling from the Court of Cassation raised doubts regarding the regime of dividends paid by a Société en Exercice Libéral (SEL) to a Société de Participation Financière de Professions Libérales (SPFPL). The recent clarification provided by the minister puts an end to this uncertainty and reassures professionals operating under this legal structure. Here’s a breakdown.

Reminder of the Situation: The Court of Cassation Ruling of 2023

The Court of Cassation ruling of October 19, 2023 (n° 21-20.366) raised questions by equating dividends paid by a SEL to a SPFPL with income from activity, potentially subject to social contributions. This risked undermining the traditional distinction between professional income and capital income for liberal professions that have structured their activities under this scheme.

This ruling generated significant insecurity among doctors, lawyers, notaries, and other liberal professionals who commonly use this legal structure to organize their activities and optimize the management of their remuneration.

The Government's Response: An Essential Clarification

In a ministerial response dated February 27, 2025 (Rm n° 418 and n° 2878, JO Sénat), the State clarified that this ruling should not be interpreted as a general challenge to the tax and social regime of SEL and SPFPL. The minister stated:

"The Court certainly intended to draw consequences from a specific situation [and] this ruling should not be viewed as a precedent undermining the distinction between legal entities and natural persons."

Thus, the bodies responsible for collecting social contributions have been officially informed that they should not systematically apply this ruling to dividends paid by a SEL to a SPFPL.

What Are the Consequences for Liberal Professionals?

For liberal professions that have structured their activities with a SEL (SELAS, SELARL, etc.) and a SPFPL, this clarification secures their situation. Specifically:

• Dividends paid by a SEL to a SPFPL remain, in principle, exempt from social contributions, except in specific cases.

• The distinction between legal entities and natural persons is maintained, thus preventing the remuneration of the SPFPL from being classified as professional income subject to contributions.
• A risk of divergent interpretation existed at the level of social bodies following the 2023 ruling; the government’s response puts an end to this.

Key Takeaway: Secure Your Situation with Legal Support

Even though this ministerial clarification is reassuring, it remains essential for liberal professionals using a SEL and a SPFPL to ensure their structure complies with current tax and social regulations.

Need to secure your financial arrangement and anticipate potential regulatory changes? Contact PRAX Avocats for tailored support.