What is a pass-through taxed company (société à l'impôt sur le revenu) in France?

In practice, in France

Two paths lead there. Some legal forms fall into it automatically — the general partnership (société en nom collectif), the civil company (société civile), and a single-member EURL whose sole shareholder is an individual. Others reach it by election — an SAS or SARL can opt for pass-through taxation if it meets the conditions on size, activity, and ownership.

The point to know before signing anything: this election is temporary and cannot be renewed. It applies for a set number of financial years fixed by law, after which the company moves permanently to corporate income tax. The family SARL (SARL de famille) is the exception — its election, reserved to members of the same family, runs for an unlimited period.

Shareholders are taxed on their share of profit whether or not they actually received it. That is the feature most often underestimated: a profitable year whose result stays in reserves still triggers personal tax.

In Odoo

The accounting does not change — same entries, same reports. What changes is downstream: how the result is split between shareholders and how each one declares it.

Keeping the capital split up to date in the company’s records avoids having to reconstruct it at closing, once it has moved during the year.

Common mistakes

• Electing pass-through taxation without realising the election has an end date, and being caught out by the switch.
• Assuming undistributed profit is not taxed at the shareholder level.
• Confusing the family SARL, with its unlimited election, with the ordinary election.