Services performed before incorporation: declaration in your PIT
If the services were performed before your company was incorporated, the Legal Aid Bureau fees must be declared in your personal income tax (PIT), even if payment arrives after you have incorporated.
Can they be included in the company?
In principle, no. For the company to be able to declare these amounts, it would need to have received a formal assignment of the Legal Aid Bureau receivables (formal, dated, enforceable and recorded in the accounts).
Taxation: average PIT rate of the previous year
Legal Aid Bureau fees received after your incorporation are considered profits from a previous professional activity. They are therefore taxed at the average rate of your last year of activity as a sole proprietor.
This rate appears on your Tax Assessment Notice (once the last year has been filed).
Exception: taxation as arrears of fees
In certain cases, a more favourable regime may apply: taxation as arrears of fees. To qualify, all of the following conditions must be met:
the services were carried out over more than 12 months,
payment was made in a single instalment,
the payment delay was due to fault or negligence on the part of the authority (Legal Aid Bureau).
This analysis must be carried out on a case-by-case basis, which often makes it complex.
In practice: what your accountant does
The Legal Aid Bureau sends a form 281.50, which lists the fees received.
Your accountant declares this amount in your PIT return, section XXI – code 1695 ("profits from a previous professional activity").
If you wish to apply the arrears taxation regime for certain cases, you must provide the total amount concerned, as well as the details of the cases that meet the conditions.
💡 Tip: when you receive your Legal Aid Bureau fees after incorporating, consider making an advance tax payment from your personal account. This will help you avoid an unpleasant surprise when you file your return the following year.