Remuneration conditions. To qualify for the reduced rate of 20% on the first €100,000 of your small company’s profits, you must receive a minimum annual remuneration of €45,000 as a director. This rule applies to every company where you are a director, except for start-up companies, which are exempt for the first four years. Your company must not be a finance company or a subsidiary, i.e. it must not be more than 50%-owned by another company, nor hold shares with an investment value of more than 50% of its paid-up capital, plus taxed reserves and booked capital gains.
Exceptions and calculation. If the remuneration is less than €45,000, it must be at least equal to the taxable profit remaining after payment of this remuneration. Benefits in kind and social security contributions paid by the company are also taken into account, but not reimbursements of professional expenses.
Watch out! If you are a director of several companies, each must pay €45,000 for the reduced rate to apply.