Payments from a prop firm, also called payouts, are not automatically reported in the same way as profits from your personal trading account.
This guide covers the French tax system.
In this article, I'm covering the case where your activity falls under bénéfices non commerciaux (BNC), the French category for non-commercial professional income. This classification needs to be confirmed for your particular contract.
In that case, a payout is business income rather than a capital gain from personal trading.
If you're still wondering whether prop firms are reliable, I've written a full article on Are prop firms a scam or an opportunity?.
Prop firm payouts and securities capital gains
Under French tax law, a capital gain on securities arises when you sell an asset you owned, such as a share or an ETF, for a profit.
You bought something, held it and then sold it for more.
For an individual using an ordinary taxable securities account, the default flat tax is 31.4%: 12.8% income tax plus 18.6% social levies. You can instead elect to use progressive income tax rates for all income and gains covered by that election.
A simulated prop firm account works differently:
- You trade in a simulation
- You have no access to real trading capital
- Your orders are not sent to financial markets
- You are paid under the terms of your contract
So that famous "profit sharing" doesn't mean you've made a capital gain on your own portfolio.
In the situation covered here, payouts are reported as BNC business income. The flat tax on your personal investment portfolio does not apply to those receipts.
Choosing a business structure
Three possible structures for reporting BNC income from a prop firm are:
- A micro-entreprise, a simplified sole-trader regime
- An entreprise individuelle under the actual-profit regime
- A company such as a SASU
| Annual receipts excluding VAT | Possible structure | Tax and contributions |
|---|---|---|
| Up to €83,600 | Micro-entreprise (BNC) | Optional 2.2% final income-tax payment if eligible, or progressive income tax after a 34% allowance. Also 25.6% social contributions and a 0.2% training contribution for an unregulated liberal activity outside Cipav, without contribution reductions. No additional deduction of actual expenses. |
| After exceeding the micro threshold for two consecutive years | Sole trader under the actual-profit BNC regime | Income tax on actual profit, with eligible expenses deductible |
| No turnover threshold requires incorporation | SASU or EURL | SASU: corporation tax by default. EURL: income tax by default where the sole shareholder is an individual, with an option for corporation tax. |
Your choice determines how much you pay, what you can deduct and how much paperwork you'll have to deal with.
Micro-entreprise under BNC
This can be a simple option if your activity qualifies and you have few expenses.
In 2026, an unregulated liberal activity outside Cipav pays social contributions of 25.6% of turnover, without any contribution reduction. A 0.2% vocational training contribution is added.
Income tax is then calculated either at progressive rates after a 34% allowance, or through the 2.2% versement libératoire, an optional final tax payment available if you meet the reference-income and election conditions.
In exchange for this simplicity, you cannot deduct actual expenses on top of the 34% allowance.
Challenge fees and subscriptions therefore cannot be deducted separately. Social contributions are calculated on receipts before the allowance.
For more detail, see my article on trading taxes in France.
Sole trader under the actual-profit regime
The micro-BNC threshold is €83,600 of receipts excluding VAT for 2026. Exceeding it for two consecutive years leads to the déclaration contrôlée regime the following year.
You can also elect this regime earlier if your expenses are substantial.
You are taxed on actual profit rather than gross turnover.
Eligible, documented business expenses may be deductible, including:
- Challenge fees
- Subscriptions
- Market data
- Training
- Equipment, depreciated where necessary
- Payment fees
A company: SASU or EURL
You can also incorporate a company, such as a SASU or EURL.
Be careful: they aren't taxed in the same way by default. A SASU is normally subject to corporation tax (IS). An EURL with an individual as its sole shareholder normally falls under income tax (IR), with an option to elect corporation tax.
For a company subject to IS, the standard rate is 25%. The reduced 15% rate on the first €42,500 of profit is reserved for companies meeting the turnover, paid-up capital and ownership conditions.
A company subject to corporation tax deducts eligible expenses before tax. You then choose how to pay yourself, with remuneration and dividends subject to their own tax treatment.
It's more complicated to manage, with more detailed accounting to keep.
Example: a $2,000 payout
Let's take a concrete example: a $2,000 payout from Apex Trader Funding.
Assume you operate a micro-entreprise under BNC for an unregulated liberal activity outside Cipav, with no contribution reductions.
For this example, we'll use a hypothetical exchange rate of €0.86 per US dollar.
The $2,000 payout therefore equals €1,720.
You report €1,720 of turnover before any payment fees.
Social contributions at 25.6% are €440.32. The 0.2% training contribution adds €3.44.
That leaves €1,276.24 before income tax.
The income tax depends on your chosen option.
| Option | Tax calculation | Amount remaining |
|---|---|---|
| Versement libératoire, if eligible and elected | 2.2% of €1,720, or €37.84 | €1,238.40 after these payments |
| Progressive income tax | €1,135.20 added to the household's taxable income | €1,276.24 before income tax |
Under progressive rates, income tax applies to the taxable amount after the 34% allowance.
For €1,720 of turnover, the taxable amount is €1,135.20.
This is added to your other income, so you can't work out your exact income tax from the payout alone.
If your income tax liability is low or zero, progressive rates may cost less than the versement libératoire.
At a higher marginal tax rate, the final-payment option may be more attractive, provided you qualify.
These amounts do not include challenge fees, subscriptions or other business expenses.
VAT when working with a foreign prop firm
If your payout pays for a business-to-business service covered by the general VAT rule, supplied from France to a taxable business established abroad, you do not charge French VAT.
- For a customer in the European Union, the invoice states "autoliquidation" (reverse charge), and a déclaration européenne de services must be submitted.
- For a customer outside the EU, the invoice states "TVA non applicable, article 259-1 du CGI".
Do you need to register before starting?
For a micro-entreprise, the registration declaration must be made no later than fifteen days after the activity begins.
The deadline runs from the start of the activity, not from the first payout. This is the deadline stated by Service Public.
