France Employee Stock Options & Equity Guide

French employee equity compensation taxation. The guide covers: the stock-options (options sur titres) — the stock-options are the right to purchase the company shares at a fixed price (the "prix d'exercice") at a future date; the stock-options are typically granted to the executives and the senior managers; the grant of the stock-options is NOT a taxable event (the "attribution des options n'est pas imposable"); the taxation at exercise (the "levée des options") — when the employee exercises the option, the difference between the market value of the share and the exercise price (the "gain de levée") is taxed as: (a) the salary income (the "traitements et salaires") if the exercise price is less than 95% of the market value of the share at the grant date, OR (b) the capital gain (the "plus-value de cession") if the exercise price is between 95% and 100% of the market value; the gain is subject to the income tax at the progressive rate (from 0% to 45%) and the social charges at 17.2% (CSG + CRDS); the gain may also be subject to the employer social charges (the "cotisations sociales patronales") at 30% (the "forfait social") if the option is granted under the favourable tax regime (the "régime fiscal de faveur"); the taxation at sale — when the employee sells the shares acquired under the stock-option plan, the capital gain (the difference between the sale price and the market value at exercise) is taxed as the PFU at 30% (12.8% income tax + 17.2% social charges) or the progressive rate; the holding period for the stock-options is typically 4 years (the "période d'indisponibilité" — the employee cannot sell the shares for 4 years from the grant date); the actions gratuites (free shares — AGA) — the free shares are the shares granted to the employees without payment (the "attribution gratuite d'actions"); the grant of the free shares is NOT a taxable event; the taxation at acquisition (the "acquisition des actions") — when the free shares are acquired by the employee (the "date d'acquisition" — typically after a vesting period of 1 to 3 years), the value of the shares (the "valeur des actions") is taxed as: (a) the salary income (the "traitements et salaires") if the vesting period is less than 2 years, OR (b) the salary income with a deduction of 50% (the "abattement de 50%") if the vesting period is at least 2 years and the holding period is at least 2 years (the "période de conservation"); the employer must pay the forfait social at 30% (the employer social charge on the value of the free shares); the employee must file the gain in the annual tax return (section "salaires" — form 2042); the BSO (bons de souscription de parts de créateur d'entreprise) — the BSO are the share subscription warrants for the start-up founders and the early employees; the BSO are typically granted by the unlisted companies (the "sociétés non cotées"); the BSO are not subject to the employer social charges; the taxation of the BSO: (a) at exercise: the gain (the "gain de levée") is taxed as the salary income (the "traitements et salaires") with the progressive rate and the social charges at 17.2%, (b) at sale: the capital gain (the "plus-value de cession") is taxed as the PFU at 30% (12.8% income tax + 17.2% social charges); the employee shareholding plans (the "actionnariat salarié" and the "PEE — Plan d'Épargne Entreprise") — the employees can invest in the company shares through the company savings plan (the "PEE") and the group savings plan (the "PERCO/PERECO"); the employer's matching contribution (the "abondement") is tax-free up to €3,737 per year (as of 2026); the dividends and the capital gains within the PEE are tax-deferred until the withdrawal (the "sortie du PEE"); the withdrawal from the PEE after 5 years is exempt from the income tax (but subject to the social charges at 17.2%). All amounts in Euros (EUR). For related reading, see our Employment Benefits Guide → and Payroll Tax Guide →.

Stock-Options — Key Rules

Grant: The grant of the stock-options is not taxable. The employee does not pay any tax at the grant date. The employer must file the stock-option plan with the tax authorities (the "régime fiscal de faveur" — the plan must be approved by the shareholders' meeting).
Exercise: The gain at exercise is taxed as salary income (the "traitements et salaires") if the exercise price is less than 95% of the market value at the grant date. The gain is subject to the income tax at the progressive rate (0% to 45%) and the social charges at 17.2%. The gain is reported on the form 2042 (section "salaires").
Sale: The capital gain on the sale of the shares (the sale price minus the market value at the exercise) is taxed as the PFU at 30% (12.8% income tax + 17.2% social charges). The employee can opt for the progressive rate. The capital gain is reported on the form 2042 (section "plus-values de cession de valeurs mobilières").

For the forfait social and the employer costs of the stock-option plans, see our Payroll Tax Guide →.

Free Shares (AGA)

Vesting (2+2 rule): The free shares benefit from a 50% deduction (the "abattement de 50%") if: (a) the vesting period (the "période d'acquisition") is at least 2 years, AND (b) the holding period (the "période de conservation") is at least 2 years. The 50% deduction applies to the value of the shares at the acquisition date (the "valeur des actions à la date d'acquisition"). The gain is taxed as the salary income (the "traitements et salaires") at the progressive rate and the social charges at 17.2%.
Short vesting: If the vesting period is less than 2 years, the full value of the free shares is taxed as the salary income without the deduction. The employer pays the forfait social at 30% (or 20% for the SMEs) on the value of the free shares.

For the PEE and the PERCO/PERECO employee savings plans, see our Employment Benefits Guide →.