Dividend
A distribution of part of a company’s net profit to its shareholders, decided by the annual general meeting. Dividends are taken from distributable reserves. In France, dividends received by individuals are subject to the 30 percent flat tax (prélèvement forfaitaire unique).
In practice
The choice between distributing a dividend and reinvesting profits is a strategic decision: a dividend paid reduces shareholders' equity and self-financing capacity. For a founder needing personal income, the comparison between salary — high social charges, deductible against corporation tax — and dividends — 30 percent flat tax, non-deductible — depends on the marginal tax rate and desired social protection level. Dividends channelled through an active holding company benefit from the parent-subsidiary exemption before flowing to individual shareholders.