Quick summary:

• RSUs give rise to an acquisition gain and a capital gain on sale, with specific tax rules in France.
• French tax residents are subject to different tax regimes depending on the date on which the RSU plans were authorised.
• Withholding tax applies to non-residents on acquisition gains arising from RSUs, in accordance with specific rules.
• The French source of the acquisition gain is determined by the period of activity in France and the terms of the foreign plans.
• It is crucial to know the tax residence, the plan authorisation date and the group structure in order to apply the tax rules correctly.

Complete guide:

RSUs are foreign mechanisms similar to free share awards (attributions gratuites d’actions), which give rise to two distinct gains in France: the “acquisition gain” (gain d’acquisition) on the date the shares definitively vest, and the “capital gain on sale” (plus-value de cession) upon sale, under tax rules modelled on those governing free shares under the French Commercial Code (Code de commerce) and the French General Tax Code (Code général des impôts, CGI).

1) French tax residents: treatment of the acquisition gain

•  Principle and timing of taxation

• The acquisition gain (value of the shares on the date of definitive vesting, net of any nominal contribution) is taxed in the year in which the shares are sold, converted to bearer form or leased, and not in the year of definitive vesting.
• Intermediate transactions (exchanges without cash adjustment in a takeover bid, merger, demerger, share split or reverse split) do not trigger taxation of the acquisition gain, which is deferred until the subsequent sale of the securities received in exchange.
•  Regime depending on the date of authorisation by the extraordinary general meeting (AGE) (or equivalent qualified plan)

• Authorisations after 30 December 2016: the gain, or the portion of the gain up to €300,000, is taxed at the progressive income tax scale with application, where relevant, of the holding-period allowances applicable to capital gains on securities (AGE up to 31 December 2017) or of a fixed 50% allowance (AGE after 31 December 2017); the portion exceeding €300,000 is taxed as salary, without any allowance
• Authorisations between 8 August 2015 and 30 December 2016: the gain is taxed in full at the progressive scale after application, where relevant, of the holding-period allowances for capital gains on securities.
• Authorisations before 8 August 2015 (awards from 28 September 2012): the acquisition gain is taxed as wages and salaries (alignment introduced by the 2013 Finance Act).
•  Social security contributions and split treatment below/above €300,000

• For plans after 31 December 2017, the international analysis specifies: up to €300,000, the progressive scale with a 50% allowance (independent of the holding period) and social security contributions on “investment income” (revenus du patrimoine) (overall rate of 18.6% since the taxation of 2025 income, 17.2% previously); and above €300,000, taxation as salary at the progressive scale, with social security contributions on “earned income” (revenus d’activité) (9.7%) and a 10% employee contribution; a 20% employer contribution for AGE decisions taken after the law (2018 Finance Act reform), increased to 30% by the 2025 Social Security Financing Act (LFSS 2025) from 1 March 2025.
• Any capital loss realised on sale may be offset against the corresponding acquisition gain, up to the amount of that gain, before the allowances are applied, and losses on other securities can never be offset against the acquisition gain (clarifications dating back more than two years).
• Capital gain on the sale of shares derived from RSUs (ordinary regime)

• The capital gain on sale (sale price minus value on the date of definitive vesting) is taxed under Article 150-0 A of the CGI, in principle under the 31.4% flat tax (prélèvement forfaitaire unique, PFU) (12.8% income tax + 18.6% social security contributions; 30% before the LFSS 2026), subject to options and special cases.
• Holding-period allowances may apply for income tax purposes, depending on the periods concerned and the applicable terms, but do not apply to social security contributions (reminder of older doctrine dating back more than two years).

2) Non-residents of France for tax purposes: withholding tax

•  Principle of withholding tax

• French-source benefits derived from free share awards (including qualified RSUs) give rise, upon the sale of the shares, to withholding tax where the beneficiary is not domiciled in France for tax purposes in the year of the sale.
• This withholding tax also applies to stock options and similar instruments, under the same provisions, with nuances regarding excess discounts.
•  Tax base and terms depending on the award date

• The tax base corresponds to the French-source portion of the acquisition gain (value on the date of definitive vesting net of any nominal contribution), determined in accordance with income tax rules, with an adjustment so that only the French-source portion is taxed according to the period of activity in France during the “vesting” periods.
• For shares awarded from 28 September 2012, the tax base is equal to the French-source portion of the value on the date of definitive vesting, less the 10% standard deduction for professional expenses (no deduction of actual expenses is allowed).
• Holding-period allowances are, where applicable, taken into account in determining the withholding tax base for plans authorised by an AGE between 8 August 2015 and 30 December 2016, and for decisions after 30 December 2016 up to a gain of €300,000, according to the administrative doctrine cited.
•  Rate and collection

• For awards before 28 September 2012, the withholding tax may, in certain cases, be levied at a flat rate of 30% on the amount of the benefit, with a discharging effect (régime libératoire) if the lock-up period is observed and no option for wages and salaries treatment has been exercised; otherwise, the “wages and salaries” withholding tax rules apply (detailed references referring to the stock option regime).
• The withholding tax must be paid by the person making payment of the sums arising from the sale of the shares, with specific rules applying in the case of a non-cooperative State or territory.

3) Determining the French source for mobile employees and foreign plans

• Benefits under equivalent foreign plans (“qualified plans”) granted by a foreign parent company or subsidiary qualify for the French regime if the conditions are similar to those under French law (shareholding link of at least 10% between the companies).
• In the event of international mobility, only the French-source “pro rata” portion of the acquisition gain is taxable in France and serves as the base for withholding tax if the person concerned is a non-resident in the year of sale, in accordance with the clarifications of the administrative doctrine (2017 reference, therefore dating back more than two years).
• International analyses also point out the existence of risky practices, in particular undeclared holding/payment outside France, targeted by the “map of abusive practices and arrangements” (carte des pratiques et montages abusifs) since February 2025.

4) Additional technical points

•  Breakdown of gains and interaction between income tax and social security contributions

• The system draws a strict distinction between the acquisition gain (specific regime depending on periods and thresholds) and the capital gain on sale (ordinary rules of Art. 150-0 A), which determines the base for the corresponding social security contributions (earned income for the salary portion above €300,000, investment income for the balance).
• For the record, older documents (for information purposes, therefore dating back more than two years) point out that holding-period allowances do not apply to the social security contributions base and that the “social contributions” base is determined before allowances, which may create discrepancies between the income tax and social contributions bases.
•  Characterisation under employment law and security of the plan
• The Cour de cassation confirmed in 2025 that, except in the case of fraud, failure to vest before the transfer of the employment contract (Art. L. 1224-1 of the French Labour Code) does not justify compensation, since the distribution of free shares is not consideration for work but a retention tool subject to the conditions of the plan.

5) Summary table

 Note: certain clarifications relating to allowances and to the social security contributions base come from documents dating back more than two years and are flagged as such for editorial transparency.

6) Practical examples

• RSUs granted by the French subsidiary of a foreign group in 2019 (AGE > 30/12/2016), definitive vesting in 2022, sale in 2025: the acquisition gain is taxed in 2025, with application of the progressive scale after a fixed 50% allowance on the portion up to €300,000 and taxation as salary above that amount, plus the PFU on the capital gain on sale.
• An employee who became a non-resident in 2025 and sells their RSU shares in 2025: withholding tax in France in the year of sale on the French-source portion of the acquisition gain only, according to the tax base rules (including the 10% standard deduction post-28/09/2012), collected by the payer of the sums.
• Capital loss on resale below the value at vesting: offset first against the corresponding acquisition gain, up to the amount of that gain, before allowances (reminder drawn from sources dating back more than two years).

7) Points to clarify in order to secure your position

 To apply these rules precisely to your case, it is essential to know:

1. Your tax residence in the year of sale of the RSU shares and, where applicable, your periods of activity in France during the vesting period.
2. The date on which the plan was authorised by the AGE (or its equivalent date for a qualified foreign plan), in order to identify the correct regime (before 08/08/2015, between 08/08/2015 and 30/12/2016, or after 30/12/2016).
3. The value of the shares on the date of definitive vesting, the existence of any “nominal contribution” and the sale price, in order to split the acquisition gain and the capital gain on sale.
4. The existence of capital losses realised on the sale of the RSU shares, so that they are correctly offset against the corresponding acquisition gain (rules dating back more than two years).
5. The identity of the payer of the sale proceeds if you are a non-resident, since the payer is liable for the withholding tax in France.
6. The group structure (parent/subsidiary, 10% threshold) in order to qualify the foreign plan as an “equivalent plan”, and any exposure to practices considered abusive in 2025 (undeclared accounts).

 Clarification questions to document:

1. What is your tax residence in the year of sale of the RSU shares, and did you have periods of work in France during the vesting period?
2. What is the authorisation date (AGE) of the plan under which your RSUs were granted or, for a foreign plan, the date and nature of its equivalence to the French regime?
3. What were the value of the shares at definitive vesting and the date of that vesting, and the sale price and date of sale?
4. Have you incurred capital losses on the sale of the RSU shares and, if so, against which amount of acquisition gain should they be offset?
5. If you are a non-resident, who pays you the sale proceeds, and did that payer apply the withholding tax provided for by Article 182 A ter of the CGI?
6. Was the plan set up by a related company (parent/subsidiary) meeting the 10% threshold, and are there any foreign accounts involved that must be declared in accordance with the 2025 anti-abuse reminders?

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