Module 218 min2192 wordsFree — no account
Comparing the two routes with figures and choosing the right mix
The module’s worked examples, then cases to attempt before revealing their solution · 2 sections · 295 words · 3 min
Worked example
All dividend, or a fee up to 50,000 euros
Stefano's SRL has 100,000 euros of income. All as dividend: corporate tax 24,000, profit 76,000, withholding 19,760, net 56,240 euros. With a 50,000-euro fee paid within the year: corporate tax on 50,000 of 12,000, net dividend 38,000 − 9,880 = 28,120; gross IRPEF on the fee 13,700, net fee 36,300. Total 64,420 euros, before contributions and surcharges.
Practical case
Roberto in the third bracket
Roberto already earns 60,000 euros of employment income. He is sole partner and director of an SRL with 20,000 euros of taxable income before paying him anything. He can take those 20,000 euros as a fee paid within the year, or let the company pay standard corporate tax and distribute the whole net profit to him as a dividend. Before contributions, surcharges and allowances, how much does he keep in each case, which route pays more, and by how much?
Hint: With 60,000 euros of other income, at what marginal rate is each euro of fee taxed? For the dividend, apply corporate tax first, then the withholding on the net profit.
Show the solution
Fee: no corporate tax; total income rises from 60,000 to 80,000 euros, all above the 50,000 limit of the second bracket, so IRPEF = 20,000 × 43 % = 8,600 euros and the net is 20,000 − 8,600 = 11,400 euros. Dividend: corporate tax 20,000 × 24 % = 4,800 euros, net profit 15,200; withholding 15,200 × 26 % = 3,952 euros, net 15,200 − 3,952 = 11,248 euros. The fee yields 11,400 − 11,248 = 152 euros more, 0.76 percent of the fee: any extra levy above 152 euros, between contributions and surcharges, reverses the result.
Answer: Fee 11,400 euros, dividend 11,248 euros: 152 euros in favour of the fee, before contributions and surcharges
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