Tax form no. 2067 concerns certain businesses subject to corporation tax or income tax under an actual profit regime. It allows the tax authorities to audit certain categories of expenses considered sensitive or potentially excessive.
This statement of overhead expenses must be filed electronically and attached to the annual income tax returns no. 2031 (businesses subject to income tax) or 2065 (businesses subject to corporation tax).
Failure to file this statement will result in penalties.
I- GENERAL PRESENTATION OF THE TAX FORM
1- Definition and purpose of the overhead expense statement:
The statement of general expenses is used to declare certain expenses to the tax authorities, which will then be deducted from the company’s taxable income. These expenses include, in particular, the salaries of the highest-paid employees, travel and transportation costs, and entertainment expenses. The statement of general expenses is submitted with the company’s annual income tax return when these expenses exceed certain thresholds.
2- Companies concerned by the declaration:
This statement must be prepared by companies engaged in commercial activity and subject to income tax (IR) under the BIC (Industrial and Commercial Profits) category, based on their actual profit (SNC, SARL and, in certain cases, SA and SAS less than 5 years old), as well as companies or organizations subject to corporation tax (SARL, SAS, SA, etc.).
Sole proprietorships are not required to file a statement of overhead expenses. They only need to include gifts and entertainment expenses in the appendix to form 2031 SD when these exceed the following thresholds:
- €3,000 for gifts (excluding items specifically designed for advertising and whose unit value does not exceed €73 per recipient);
- €6,100 for entertainment expenses, including restaurant and entertainment costs.
Businesses operating under the micro-enterprise regime are not required to prepare a statement of overhead expenses or declare gifts and entertainment expenses.
II- CONTENTS OF THE OVERHEAD EXPENSES STATEMENT
After indicating the address of the main establishment (for companies subject to corporate income tax), or of the company’s management otherwise, the following expenses must be entered:
1- Expenses allocated directly or indirectly to the highest-paid individuals (A frame):
- How are the highest-paid people defined? These are the 10 or 5 highest-paid individuals, depending on whether the workforce exceeds 200 employees. To determine who these individuals are, all direct and indirect compensation must be considered. The selection of these individuals may be based on expenses incurred during the previous fiscal year; this choice must be indicated in section C.
Note: The highest-paid individuals may include not only those with employee status but also individuals such as majority shareholders of “SARL” as well as those who, while engaged in non-commercial activities (consulting lawyers, consulting architects, technical advisors, etc.), provide exclusive and permanent support to the company in question.
However, the following are excluded:
- those who are subject to income tax (IR) in the category of business profits (BIC) due to their activity within the company, and in particular members of partnerships when these partnerships have not opted for corporate income tax (IS);
- those who carry out commission-based remuneration, but are neither managers nor employees of that company.
- Direct or indirect remuneration (columns 1 to 4): The following should be mentioned under these headings:
Total amount of remuneration of any kind (column1): This includes fixed or proportional remunerations, commissions or fees, as well as various allowances or benefits deductible from the employer’s taxable income. This column must also include allowances, reimbursements, or lump-sum payments for expenses paid to managers and employees. However, severance pay, retirement bonuses, non-compete payments, and termination payments should be excluded.
Miscellaneous allowances and benefits (column 2): These are various fixed-rate professional allowances (flat-rate allowances for representation and travel expenses, for example) which do not constitute a salary supplement.
Value of benefits in kind (column 3): These must be assessed according to their intrinsic and real value (making accommodation available to the employee for example).
Amount of expense reimbursements (column 4): This refers to reimbursements for strictly personal expenses unrelated to business operations.
Note: Incentive trips, due to their unpredictable nature, should not be included in the general expenses statement.
All amounts indicated above must correspond to expenses actually incurred by the company, including any outstanding balances at the end of the fiscal year.
Thresholds above which the above expenses amounts must be declared:
Direct and indirect compensation (including expense reimbursements) paid:
- to the 10 highest-paid individuals in companies with more than 200 employees: €540,000
- to the 5 highest-paid individuals in companies with fewer than 200 employees: €270,000
- to any one of these individuals: €50,000
- Travel and transportation expenses incurred by these individuals (column 6): This category includes all travel and transportation expenses (hotel, restaurant, etc.) excluding lump-sum allowances which must be mentioned, as appropriate, in column 1 or 2. Only “travel and transportation expenses” incurred in the course of managing the company and for which it is responsible are concerned.
Thresholds above which the above expense amount must be declared: € 15,000
- Expenses and charges related to vehicles and other assets made available to these individuals (column 7): This category includes expenses related to motor vehicles, private aircraft, boats or pleasure craft made available by the company to the highest-paid individuals, whether or not this provision involves compensation. With regard to cars, expenses and charges include all costs of petrol, insurance, maintenance and repair as well as depreciation charges, less, where applicable, the value of the benefit in kind corresponding to the free use of the vehicle for the user’s private needs.
- Expenses and charges relating to buildings not used for business purposes and made available to the persons concerned (column 8): This concerns expenses and charges of any kind, including depreciation, related to residential properties made available by the company to its highest-paid employees. The amount of these expenses and charges is reduced, where applicable, by the amount of indirect compensation related to the corresponding benefit in kind.
Thresholds above which the above expenses (provision of vehicles, other goods and buildings) amount must be declared: € 30,000
2- Other expenses (B frame):
- Gifts other than items specifically designed for advertising: This refers to gifts of any kind (objects, foodstuffs, cash or other products) that the company gives free of charge to people who have, or are likely to have, business relationships with it.
Note: Items specifically designed for advertising and whose value, for the year and for the same beneficiary, does not exceed €73 including all taxes should not be taken into account.
Thresholds above which the above expenses amount must be declared: € 3,000
- Entertainment expenses: This category includes entertainment expenses, including restaurant expenses, which are related to the management of the company even if these expenses were advanced by a manager or executive of the company.
The following are not included in this category:
- expenses incurred by a company for periodic meetings organized between members of its staff or its representatives;
- expenses that are primarily for advertising purposes.
Thresholds above which the above expenses amount must be declared: € 6,100
3- Reference data (C frame):
- Total expenses: For expenses from the last fiscal year, the total allocated expenses indicated in Section A, column 9, and the “Other expenses” noted in Section B, column 10, should be carried forward. For expenses from the previous fiscal year, the taxpayer must carry forward the totals for the same items entered on the previous tax return.
- Taxable profits: This refers to the tax result declared by the company for the last financial year and for the previous financial year (shown in table 2058A), excluding capital gains or losses from the sale of fixed assets and losses carried forward from previous financial years.
III- CONSEQUENCES OF THE PRINT PRODUCTION FAILURE
Companies that fail to file a statement of general expenses or to include deductible expenses are subject to a penalty equal to 5% of the amounts not shown on the statement. This rate is reduced to 1% whenever the omitted or inaccurate information relates to amounts actually deductible for the purpose of determining taxable income. However, the penalty is waived for a first offense committed during the current calendar year and the three preceding years, provided the companies have rectified their omission either spontaneously or upon the first request from the tax authorities.
In all cases, however, the expenses in question remain normally deductible for the purpose of determining taxable income.
IV- USE OF STATEMENT NO. 2067 BY THE TAX AUTHORITIES
The tax authorities may add back into the company’s taxable income the expenses in question when they are excessive and cannot be considered as having been incurred in the direct interest of the company. However, recourse to this procedure is exceptional because the burden of proof lies with the tax authorities to demonstrate the excessive nature of the expenses.
The amounts thus added back into the taxable profit should normally be considered as distributed income and taxed in the name of the beneficiaries.
In conclusion, we emphasize the need for a rigorous analysis of the expenses covered by this form, as well as perfect consistency between accounting and tax returns. We can assist you in its preparation to minimize the risk of penalties and strengthen your company’s tax compliance.
