1) RSUs = free share awards

• In practice, “RSUs” correspond under French law to “free share awards” (attributions gratuites d’actions)

2) Free share awards (RSUs)

2.1 Income tax

• For RSUs (free shares) authorised by an extraordinary general meeting (assemblée générale extraordinaire, AGE) as from 31 December 2016 (reform resulting from Law no. 2016-1917 of 29 December 2016, Art. 61, and then from Law no. 2017-1837 for AGEs held after 31 December 2017), the acquisition gain is taxed in the year of sale under a mixed regime: up to €300,000 per year, taxation at the progressive income tax scale after application, where relevant, of the holding-period allowances specific to capital gains on securities (fixed 50% allowance for AGEs held after 31 December 2017); above that amount, taxation as wages and salaries with no allowance.
• The tax authorities (administration fiscale) have specified that the €300,000 limit is assessed annually, per tax household, by aggregating the acquisition gains from all plans authorised since 31 December 2016 whose shares are sold in the same year, and that it cannot be carried forward.
• Where a capital loss arises on the sale, it is offset, for the purpose of assessing the €300,000 threshold, against the acquisition gain, up to the amount of that gain, before application of the holding-period allowances.

2.2 Social levies and social security contributions

• From a social security standpoint, the benefit derived from the free award of RSUs is exempt from social security contributions, provided that the statutory conditions are met and that a nominative DSN (déclaration sociale nominative) filing is made (identity, number and value of the shares at the end of the vesting period); failing this, the employer is liable for all the contributions (a penalty held to be constitutional: Cons. const. 22-2-2019 no. 2018-767 QPC), and the benefit is valued at the date of final acquisition [Cass. 2e civ., 5 Sept. 2024, no. 22-18.293 F-B].
• For awards authorised by an AGE held after 30 December 2016, CSG/CRDS applies at the time of sale: on the portion of the acquisition gain not exceeding €300,000, at the rate applicable to investment income (levies at an overall rate of 18.6% since the taxation of 2025 income, 17.2% previously); on the excess portion, at the rates applicable to earned income (9.7%), these contributions nevertheless being collected in the same way as those on investment income.

2.3 International mobility and withholding tax (non-residents)

• For a beneficiary not domiciled in France in the year of the taxable event (in principle, the sale for compliant plans), French withholding tax is due on the portion of the acquisition gain corresponding to the activity carried out in France during the reference period, subject to tax treaties (French General Tax Code (Code général des impôts, CGI), Art. 182 A ter; BOI-IR-DOMIC-10-20-20-30).
• The reference period runs from the award until the time when the right to the award is definitively acquired: if there is no condition precedent, this is the date of award; if there is a presence or performance condition, the period runs until that condition is fulfilled, in accordance with the administrative doctrine applied to free shares.

3) Stock options

3.1 Taxable event and breakdown of the gain

• The mechanism confers a right to subscribe for or purchase shares at a fixed price; on the sale of the shares, the gain breaks down into two taxable components in the year of sale: the acquisition gain (value on exercise less exercise price) and the capital gain on sale (sale price less value on exercise).
• Where the options were granted under the conditions of Articles L 225-177 to L 225-186, the exercise of options on unlisted shares does not give rise to immediate taxation, taxation occurring on sale, unless the statutory conditions are not met [CGI Art. 80 bis].

3.2 Tax category of the acquisition gain and consequences of non-compliance

• For options granted as from 28 September 2012, the acquisition gain is taxed under the wages and salaries regime, which represents a change from previous regimes, while in practice retaining the sale of the shares as the taxable event.
• Where the issuance/grant conditions laid down by the French Commercial Code (Code de commerce) are not met, Article 80 bis of the CGI does not apply, and the exercise benefit is treated as remuneration taxable in the year the options are exercised, and is subject to the contributions and taxes based on salaries.

3.3 International mobility and date on which residence is assessed

• With regard to tax treaties, the Conseil d’État holds that residence is assessed at the date on which the income is realised and not at the date of its taxation under domestic law; for stock options, the relevant date is therefore the date of exercise of the option (gain realised within the meaning of Art. 80 bis), even if taxation occurs on sale [CE, 4 June 2019, no. 415959].

3.4 Recent interaction with “management packages”

• For sales and similar transactions carried out since 15 February 2025, the tax regime for stock options must, where applicable, be combined with the regime applicable to gains derived from “management package” instruments, which may affect the characterisation of the gain depending on the features of the plan.

4) Summary table

5) Practical points to watch

• Carefully check, for each plan, the date of authorisation by the AGE and the presence/performance conditions, in order to identify the applicable tax and social security regime (including the €300,000 bracket rule for plans authorised since 31-12-2016).
• In the event of international mobility, document the reference period (days of activity per State) and, for stock options, the exercise date for treaty analysis, and apply, for RSUs, withholding tax on the French-source portion under Article 182 A ter in the absence of any treaty provision to the contrary.
• In the event of failure to meet the statutory conditions (“non-qualifying” plans or non-compliance with DSN/Urssaf obligations), anticipate the possible recharacterisation as salaries and the claim for the corresponding contributions and levies.

 In summary, since 2016/2017 for RSUs, the taxation of the acquisition gain on sale combines a bracket “treated as capital gains” up to €300,000 and a “salaries” bracket above that amount, with distinct social security rules, whereas for stock options the taxable event remains the sale, but the acquisition gain falls, for options granted since 28 September 2012, within wages and salaries, subject to recharacterisation in the event of non-compliance and to the specific rules applicable in situations of international mobility.

Any questions? Our tax law firm can assist you.