France's tax authority has issued guidelines on the tax treatment of gains from management packages held by employees and executives, with the regime applying to transactions carried out on or after 15 February 2025.
France’s tax authority has published official guidelines (BOI-RSA-ES-20-60-20261015) on 15 October 2026 on how gains from management packages are taxed. The regime is set out in Article 163 bis H of the French General Tax Code (CGI), introduced by the 2025 Finance Act and amended by the 2026 Finance Act. It covers sales, exchanges, conversions and rentals of securities carried out on or after 15 February 2025.
Under the regime, the net gain is divided in two. One part is taxed as a capital gain, and the remainder is taxed as salary income. The dividing line depends on a ceiling linked to the financial performance of the company.
Who and what is covered
The regime applies to employees and executive directors (salariés ou dirigeants) of the issuing company, its parent company (société mère) or its direct or indirect subsidiaries (société fille).
Eligible instruments are equity securities or instruments giving access to share capital. These include:
- ordinary shares and preference shares (ADP)
- share warrants (BSA)
- convertible or redeemable bonds (OCA/ORA)
- free shares (AGA/AGADP)
- stock options (OST)
- founder warrants (BSPCE)
Pure debt instruments, such as plain bonds, are excluded.
The securities must carry a genuine risk of loss on their acquisition price or initial value. A guaranteed sellback at or above the purchase price rules them out.
Securities must generally be held for at least two years, counted from date to date. Free shares (AGA), stock options and BSPCEs are exempt from this condition.
Which gains are caught
The regime applies to the net gain, meaning sale proceeds minus expenses and taxes, where it is realised in consideration of the holder’s duties as an employee or executive. The link is assessed through a cluster of indicators. These include mechanisms that enhance financial gain, such as sweet equity, performance ratchets, or a share of capital out of proportion to the investment.
Initial acquisition discounts and exercise gains, such as those on stock options or BSPCEs, fall outside the regime. They remain subject to their own statutory employment tax rules.
How the ceiling works
The ceiling is calculated from the initial value of the securities and their financial performance, using the formula set out in the guidelines.
- Initial value: the value of the securities at the date of acquisition or subscription.
- Financial performance: the ratio between the real value of the reference company at the sale date and its real value at the acquisition date. Real value includes equity value plus shareholder or affiliated company debt, adjusted for capital increases, capital reductions and shareholder loans.
- Deductions: the ceiling is reduced by any dividends or capital reduction proceeds paid to the executive during the holding period.
Tax treatment of each portion
Portion up to the ceiling (capital gains regime)
- It is taxed under the standard capital gains on securities regime (plus-values de cession de valeurs mobilières, CGI Art. 150-0 A).
- Tax roll-over and deferral mechanisms (CGI Art. 150-0 B / 150-0 B ter) are available, as is the fixed allowance for retiring SME executives.
- Social levies on investment income apply at 17.2%. No standard social security contributions are due from either employee or employer.
Excess portion above the ceiling (fraction excédentaire)
- It is taxed under the ordinary salaries and wages rules (traitements et salaires) in the year of disposition.
- A specific 10% employee social contribution applies (CSS Art. L. 137-42). The portion is exempt from employer social security contributions.
- Tax deferral is available if the proceeds are reinvested in eligible corporate exchange operations.
Gifts and equity savings plans
For gifts or manual transfers of management package securities made on or after 20 February 2026, the gain is calculated and taxed in the donor’s hands in the year of the gift.
Management package securities acquired on or after 15 February 2025 cannot be held in Equity Savings Plans (PEA/PEA-PME). Gains on such securities inside a PEA get no tax exemption. Realising such gains on or after 20 February 2026 closes the plan.
