Employees of international groups often receive part of their remuneration in shares: stock options, free shares or RSUs (restricted stock units), frequently under a plan set up by a foreign parent company. For a French tax resident, the corresponding gain is in principle taxed in France, under rules that depend on the type of plan and its date.
This article presents the essentials of these rules, with two worked examples. The rules applicable to RSUs are detailed in the complete guide to the taxation of RSUs, and share purchase plans in the ESPP guide. Each plan deserves to be analysed, ideally with a lawyer.
In brief
- Under French law, RSUs in principle correspond to free share awards; a foreign plan may follow the French regime if it meets its conditions (a so-called “qualified” plan).
- For a qualified plan, the acquisition gain (value of the shares on the day they vest) is in principle taxed in the year the shares are sold.
- For free shares under plans authorised since 2018, this gain is in principle taxed at the progressive scale after a 50% allowance up to €300,000 a year, and like a salary above that.
- For stock options granted since 28 September 2012, the exercise gain is in principle taxed like a salary; the capital gain on sale follows the regime for gains on securities.
- In the event of international mobility, France in principle taxes the part of the gain linked to work performed in France, subject to treaties, which may, in some cases, allocate the gain between the States (to be analysed by a lawyer); securities accounts opened abroad are in principle declared every year.
Contents
Three mechanisms, several key moments
Employee share plans involve a few stages, on which the tax calculation depends:
| Mechanism | What the employee receives | Key moments |
|---|---|---|
| RSUs and free shares | The right to receive shares free of charge at the end of a vesting period | Grant, vesting of the shares, sale |
| Stock options | The right to buy shares at a price set in advance (exercise price) | Grant, exercise of the option (purchase of the shares), sale |
| Employee share purchase plan (ESPP) | The right to buy shares, often at a discount (see the guide) | Purchase of the shares, sale |
Free shares and RSUs: how the gain is taxed
The gain is split into two parts. The acquisition gain corresponds to the value of the shares on the day they vest. The capital gain on sale corresponds to the difference between the sale price and that value.
For a qualified plan, i.e. one that complies with the conditions of the French Commercial Code, the acquisition gain is in principle taxed in the year the shares are sold, not the year they vest. For a non-qualified plan, it is in principle taxed like a salary on vesting. For a qualified plan, the regime depends on the date on which the shareholders’ meeting authorised the plan:
| Date of authorisation of the plan | Acquisition gain up to €300,000 a year | Above €300,000 a year |
|---|---|---|
| Since 1 January 2018 | Progressive scale after a 50% allowance; social security contributions of 18.6% on the gain before the allowance (17.2% before the taxation of 2025 income) | Taxed like a salary, without allowance; CSG and CRDS of 9.7% and an employee contribution of 10% |
| From 31 December 2016 to 31 December 2017 | Progressive scale after the holding-period allowances for gains on securities (50% or 65%); social security contributions on investment income | Taxed like a salary, without allowance; CSG and CRDS of 9.7% and an employee contribution of 10% |
| From 8 August 2015 to 30 December 2016 | Progressive scale after the holding-period allowances, with no €300,000 threshold; social security contributions on investment income | Same regime, no threshold |
The €300,000 threshold is in principle assessed each year, per tax household, by adding up the acquisition gains on shares sold during the year. The capital gain on sale falls under the regime for gains on securities: in principle the 31.4% flat tax for disposals made since 2025 (12.8% income tax and 18.6% social security contributions), or, on an overall option, the progressive scale. In the event of a capital loss on sale, it is in principle set against the acquisition gain, within the limit of that gain.
Example: free shares sold in 2025
Claire, a French tax resident, receives free shares: RSUs under a qualified plan authorised in 2022. In 2024, 6,000 shares vest, at a value of €100 each; she sells them in 2025 at €120.
| Item | Calculation | Taxation in 2025 |
|---|---|---|
| Acquisition gain | 6,000 × €100 = €600,000 | Two fractions: up to €300,000 and above (rows below) |
| Fraction up to €300,000 | €300,000 − 50% allowance | €150,000 after the allowance, added to taxable income under the progressive scale (for example about €67,500 of tax at a 45% marginal rate) |
| Social security contributions on this fraction | €300,000 × 18.6% | €55,800 |
| Fraction above €300,000 | €600,000 − €300,000 = €300,000 | Taxed like a salary, at the progressive scale, without allowance (for example about €135,000 of tax at a 45% marginal rate) |
| CSG and CRDS, employee contribution on this fraction | €300,000 × 9.7% and €300,000 × 10% | €29,100 and €30,000 |
| Capital gain on sale | 6,000 × (€120 − €100) = €120,000 | Flat tax: €120,000 × 31.4% = €37,680 |
Stock options: how the gain is taxed
The exercise gain corresponds to the difference between the value of the share on the day the option is exercised and the exercise price. For a plan that meets the legal conditions, it is in principle taxed in the year the shares are sold. For options granted since 28 September 2012, it is, as a general rule, taxed like a salary, at the progressive scale, and bears CSG and CRDS of 9.7% and an employee contribution of 10%. The capital gain on sale, above the value on the day of exercise, in principle follows the regime for gains on securities.
Where the plan does not meet the legal conditions, the benefit is in principle taxed like a salary on exercise of the option and subject to social security contributions. Since 15 February 2025, a specific regime (article 163 bis H of the French General Tax Code) may also cover gains on certain securities acquired by employees or executives (“management packages”); how it interacts with the rules on stock options and free shares deserves to be checked case by case.
Example: stock options exercised and sold in 2025
Marc, a French tax resident, exercises, in 2025, 20,000 options granted in 2020, at an exercise price of €50, when the share is worth €80; he sells the shares the same year at €90.
| Item | Calculation | Taxation in 2025 |
|---|---|---|
| Exercise gain | 20,000 × (€80 − €50) = €600,000 | Taxed like a salary, at the progressive scale |
| CSG and CRDS, employee contribution | €600,000 × 9.7% and €600,000 × 10% | €58,200 and €60,000 |
| Capital gain on sale | 20,000 × (€90 − €80) = €200,000 | Flat tax: €200,000 × 31.4% = €62,800 |
International mobility: arriving in or leaving France
The gain often rewards a period of work performed in several countries. In principle, France taxes the part of the gain corresponding to work performed in France during the reference period (generally from grant to vesting, or to the date on which the option may be exercised), subject to tax treaties, which may, in some cases, allocate the gain between the States according to working days; only an analysis of the situation by a lawyer can determine whether or not the treaty allows this. For stock options, the Conseil d’État holds that residence for treaty purposes is in principle assessed at the date the option is exercised (CE, 4 June 2019, no. 415959).
Where the beneficiary is no longer domiciled in France in the year of the sale, a withholding tax is in principle due in France on the part of the gain linked to work performed in France (article 182 A ter of the French General Tax Code), subject to treaties. Arrivals and departures are covered in the articles on changing tax residence during the year and on foreign RSUs and stock options.
Points to watch
Several elements generally determine the tax treatment of a plan:
- the date of authorisation of the plan and whether or not it is qualified under French law, in particular for a foreign plan;
- the value of the shares at vesting or exercise, and the sale price, to distinguish the acquisition or exercise gain from the capital gain on sale;
- the working days spent in each country during the reference period, in the event of international mobility;
- the securities account in which the shares are held: if opened with a foreign institution, it is in principle declared every year on form no. 3916-3916-bis (see which foreign accounts to declare).
These technical rules depend on each plan and on each beneficiary’s situation. An analysis with a lawyer, preferably before the shares are sold, generally makes it possible to check the applicable regime and the tax due in France.
What I see in my cases
In my RSU, stock option and free share cases, plans are sometimes poorly structured and payroll steps in France are not always carried out: the situation then needs to be put right intelligently, without creating a tax problem. For qualified plans, several regimes coexist: each group of securities requires its own analysis, and optimisations are often possible, for example depending on the holding period.
The most important thing is not entering amounts in boxes, but having optimised the situation and being ready to answer in a solid, simple and clear way if the tax authorities ask questions.
The employers concerned are mainly large tech companies, American, British and sometimes from European Union countries. The tax authorities, which mainly ask for the bank statements relating to the sales and sometimes the plans, are not very comfortable with these subjects, particularly in cases of international mobility: explanatory work is often necessary. Some clients consult me after being reassessed and losing a benefit; the situation cannot always be put right, hence the value of being advised from the outset.
FAQ
Are a foreign employer’s RSUs free shares under French law?
They may be if the plan meets the conditions of the French Commercial Code (a so-called “qualified” plan, often through a French sub-plan). Otherwise, the gain is in principle taxed like a salary on vesting.
When is the acquisition gain taxed?
For a qualified plan, in principle in the year the shares are sold, even if they vested several years earlier.
How is the €300,000 threshold assessed?
In principle each year, per tax household, by adding up the acquisition gains on shares sold during the year under plans authorised since 31 December 2016; any unused portion cannot be carried forward.
The shares are held with a foreign broker: is the account declared?
In principle yes: a securities account opened abroad is declared every year on form no. 3916-3916-bis, even if it is only used to receive the plan shares.
I worked in several countries during the vesting period: what does France tax?
According to the rules of the applicable treaty, France could, in some cases, tax only the part of the gain corresponding to work performed in France during the reference period, which needs to be checked by a lawyer; for a non-resident, a withholding tax in principle applies to that part.
What happens if the shares are sold at a loss?
For free shares, the capital loss on sale is in principle set against the acquisition gain, within the limit of that gain. Losses on other securities are in principle not set against this gain.
