Partner current account: operation and taxation

Verified 05 April 2024 - Directorate for Legal and Administrative Information (Prime Minister)

In order to meet the cash flow requirements of a business, partners, managers or employees may make available to the business funds called advances in current accounts. These advances are considered to be interest-bearing loans. Interest paid to shareholders is deductible from the company's profits provided certain criteria are met.

To meet its cash flow needs, businesses can use a variety of methods: capital increase, borrow from a credit institution or to arrange advances on current account (also called current account contributions).

The associate current account is a loan granted by a partner, an officer or an employee to the business.

The details of the current account (remuneration, duration, reimbursement, etc.) are specified in the statutes or in a current account agreement between the business and the partner.

Who can make partner current account advances?

Persons able to make advances known as on current account and thus benefit from partner current account are:

  • Partners and shareholders, natural persons regardless of the number of shares or shares held in the capital
  • Leaders : Director, member of the Executive Board and Supervisory Board, Managing Director, Chairman of SAS, Managing Director, Managing Director of SA or SAS
  • Employees business within 10%of equity
  • Commercial businesses (SA, SARL: titleContent, LOCK: titleContent, SCA: titleContent) whose accounts are certified by a auditor. These may consent, as an incidental matter, of loans less than 3 years to other businesses with which they have an economic relationship (referred to as an "intergroup loan" or "cash pool").

Please note

There is no partner current account in a individual business.

How much money can be paid into the partner's current account?

The current account is supplied with one of the following ways :

  • By the remuneration of the manager, the employee
  • By any dividends or reimbursement of fees that have not been collected
  • By sums of money deposited voluntarily by the partner, manager or employee

In all cases, the person making the advance on a current account shall have a claim with respect to business. Advances on current account are therefore recorded at indebted the business’s balance sheet.

When the partner's current account is debtor, this is equivalent to a current account overdraft. This means that the partner owes money to the business.

He is forbidden the following persons to have a current account debit:

  • Managers and associates natural persons of a SARL: titleContent
  • Directors and Directors-General of an SA and LOCK: titleContent.

However, legal person (i.e. a business) may have a current account receivable. This is common among business groups.

Please note

In the SCI: titleContent and in the Scop: titleContent, current accounts may be debit.

The current account of the partner is analyzed as a partner's loan to business. It may therefore be remunerated, like a bank loan, by the payment ofinterest to this associate.

The interest rate shall be fixed by the statutes or by the current account agreement between the business and the partner.


If the partner is a natural person, the latter may freely waive interest. On the other hand, where the partner is a business or an association, it is not possible to grant an advance on current account without any consideration, i.e. without payment of interest.

When the current account of a member is remunerated, the interest paid to the members may be deducted from taxable profit business.

However, this deduction is limited for tax purposes by a maximum rate of deductible interest, also known as the ‘reference rate’. The amount varies according to the closing date the exercise of business.

Thus, when the interest rate (fixed by the articles of association or agreement) is above the reference rate, the excess part of the interest paid to the member is not deductible taxable profit.

Tableau - Maximum 12-month interest deductible


Benchmark Rate

October 31 to November 29, 2022


November 30 to December 30, 2022


From 31 December 2022 to 30 January 2023


January 31 to February 27, 2023


February 28 to March 30, 2023


March 31 to April 29, 2023


April 30 to May 30, 2023


May 31 to June 29, 2023


June 30 to July 30, 2023


July 31 to August 30, 2023


August 31 to September 29, 2023


September 30 to October 30, 2023


October 31 to November 29, 2023


November 30 to December 30, 2023


From 31 December 2023 to 30 January 2024


From 31 January 2024 to 28 February 2024


February 29, 2024 to March 30, 2024


March 31, 2024 to April 29, 2024 


April 30 to May 30, 2024


May 31 to June 29, 2024


Example :

A partner grants the business a current account advance of €20,000. The interest rate is fixed at 2.5%.

The business fence its fiscal year on November 30, 2022, the reference rate is therefore 1.87% (see table above).

Upon repayment of the funds, the business shall pay to the partner €500 of interest (2.5% 20 000).

However, the business may deduce only €374 (1.87% of 20,000) of its taxable profit. The surplus of €126 (500-374) will not be eligible for deductible expenses.

In general, the terms of repayment of the partner's current account are specified in the statutes or in the current account agreement.

In the absence of precision, the claim that the partner has in respect of the business is redeemable at any time.

When requested by the partner, the business shall have a five-year period from the date of application to repay the debt.


The partner may give up his right to reimbursement.

Can the repayment of the current account be blocked?

Block a partner's current account means that the business is no longer obliged to repay the funds provided. The business then has real, permanent capital.

This decision shall be taken either at unanimity of the general meeting of shareholders, or in a blocking convention (a contract) signed between the business and the partner. It thus serves as a guarantee in connection with the granting of credit by a banking institution.

Can the business refuse to repay the current account?

Where the member claims reimbursement of his current account, the business cannot refuse reimbursement (even due to financial difficulties). Nor can it limit repayment to the amount that its cash can support.

On the other hand, the business may require payment periods (limited to 2 years) to repay the current account.

What happens in the event of the business being judicially reformed or liquidated?

After opening a collective proceedings, the business shall no longer be entitled to repay the current account of a member. The partner must therefore, like any creditor, to declare his claim to the judicial representative or the liquidator.

In this case, the partner is reimbursed after the preferred creditors business and if the finances of the business permit.

The applicable tax rules the current accounts of the member are different for the business receiving the advances and the member holding the current account.

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beneficiary business

The interest paid to the partner is financial charges deductible from profit or loss of the company provided that the company complies with 2 conditions following:

  • The share capital is fully freed (i.e. the members must have paid their entire contribution the capital of the company).
  • The interest rate charged shall not exceed reference rate (reference is made to the gross rate before taxation)


When the interest rate set is above the reference rate, the excess part constitutes a non-deductible charge the benefit of the business. Each current account must be examined separately and there can be no offsetting between an interest overrun on one current account and a shortfall on another.

Moreover, current account advances constitute a form of loan.

The company that benefits from it must deposit every year a loan contract declaration (cerfa no 10142), at the latest on the date of submission of its income statement.Calculation sheet to be attached to the income statement - BOFIP - taxes - ZRD

Loan contract declaration


Associate natural person

Interest received by the individual partner is fixed income investment income taxed under the single flat-rate levy or integrated into the progressive schedule of income tax.

Partner legal person (business or association)

Interest received by the legal person imposed on business tax are taxable financial products.

For a company that is subject to income tax, interest is taxed via income tax of his associates.

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