Equity securities subject to corporate income tax: capital gains on disposal and share of 12 %

A company subject to corporation tax (CIT) that sells equity securities held for at least two years has its net long-term capital gain taxed separately at a rate of 0.%. However, a portion of expenses and charges equal to 12.% of the gross amount of the capital gain is added back to its profit and taxed at the standard CIT rate. CIT is calculated on this portion, not on the capital gain itself.

This page deals with the company making the sale. It does not cover dividends received from a subsidiary (parent-subsidiary regime), capital gains for individuals, the taxation of shareholders when the holding company distributes the proceeds, or listed real estate-focused companies. It follows the official French tax guidelines (BOFiP), in the versions cited at the end of the page, as well as the BOFiP update of July 22, 2026, regarding the registration of eligible securities.

The three-step mechanism

The 0 % rate applies to capital gains and losses on disposals, as well as allocations and reversals of provisions on these securities. Disposal is defined as any transaction that removes the securities from the asset base: sale, contribution, exchange, repurchase, cancellation, or transfer to another account.

Which securities are affected?

The BOFiP (Official Bulletin of Public Finances) identifies three categories of equity securities:

1. equity securities in the accounting sense; ;
2. shares acquired following a public takeover or exchange offer launched by the company; ;
3. securities that qualify for the parent-subsidiary regime.

The last two must be recorded in the equity securities account or a special sub-account. The third requires meeting the conditions of the parent-subsidiary regime, the holding threshold for which must be checked in the BOFiP (Official Bulletin of Public Finances) before any decision is made.

Another condition: the securities transferred must have been held for at least two years to qualify as long-term.

An option to register since the finance law for 2026. According to BOFiP ACTU-2026-00081 of July 22, 2026, Article 15 of Law No. 2026-103 of February 19, 2026 (Finance Law for 2026) amends paragraphs a ter and a quinquies of Section I of Article 219 of the French General Tax Code (CGI). Companies subject to corporate income tax (IS) may record equity securities recorded as such in their accounts in a special sub-account entitled "Securities Subject to the Long-Term Capital Gains Regime." According to this news item, this registration is a management decision that creates an irrebuttable presumption of the application of the long-term capital gains regime, enforceable against both the company and the tax authorities. It applies to fiscal years ending on or after December 31, 2025. The BOFiP commentaries cited at the end of the page do not yet mention this sub-account. The text of the law has not been reviewed for this page: the exact conditions of the option are verified at the source before any registration.

Securities excluded from the 0 % rate

Some securities remain outside the regime. Their capital gains and losses are taken into account in full in the taxable income, at the standard rate, including certain capital gains previously subject to deferred taxation.

Listed real estate-focused companies are the subject of a separate commentary in the BOFiP, which is not covered here.

The share of 12 %: how it is calculated

For fiscal years ending on or after December 31, 2012, the share representing expenses and charges is equal to 12 %. Four rules to remember:

• The tax base is the gross amount of capital gains. Capital losses are excluded from the tax base. It includes deferred capital gains whose maturity falls within the financial year and the difference between the sale price and the difference.
• No cap. The BOFiP states that no limitation or ceiling on the tax base can be applied.
• The triggering event is a net capital gain. The realization of a net long-term capital gain during the fiscal year triggers the reinstatement of the gain. For a capital gain that has been deferred or suspended, the taxable event is postponed until the end of the deferral or suspension period.
• The rate is that of the IS (corporate income tax). The share is subject to corporate income tax at the standard rate of 25%. The BOFiP (Official Bulletin of Public Finances) also mentions the additional contribution of 3.3% and the reduced rate of 15% for SMEs. According to Service-Public Entreprendre (information verified on 17/02/2026), the 15% rate applies to profits up to €42,500, provided the turnover is no more than €10 million and at least 75% of the capital is held by individuals.

The example from BOFiP illustrates the gross base: three sales of +€100,000, -€200,000 and +€200,000 give a net capital gain of €100,000, but the share is calculated on the gross capital gains of €300,000, i.e. €36,000.

Do not confuse with dividends: in the parent-subsidiary regime, the share is 5 % of the products (1 % in a tax group).

Capital losses: no deduction

The net long-term capital loss in the sector at 0 % cannot be deducted from taxable income. It can no longer be offset or carried forward to subsequent fiscal years. Provisions for impairment of these securities are not deductible. In the absence of an express provision, reversals of provisions on these securities are not taxed.

In this exercise, the capital loss is offset against capital gains in the same sector. It does not reduce the base for the share, which is gross.

Four special cases

• Tax group. The transferring company reinstates the share in its individual profit. For transfers of equity interests between companies within the same tax group, during financial years beginning on or after 01/01/2019, the share of 12 % is no longer neutralized for the group's overall profit.
• Partnership. It can allow its partners subject to corporate income tax to benefit from the 0% % regime. It then reintegrates the share into its own taxable income.
• Subsidiary abroad. As a general rule, transfers of equity interests, excluding companies whose assets consist primarily of real estate, are taxable only in the transferor's country of residence, unless the tax treaty specifies otherwise. When the tax treaty so provides, the foreign tax is credited against the portion of corporate income tax attributable to the share. The remaining amount cannot be carried forward. In the example from the BOFiP (transfer price 100, acquisition price 30, foreign tax 10), the share is calculated on a base of 70.
• Transfer out of the equity securities account. No share is reinstated in the year of the transfer.

Numerical example (fictitious profile)

Situation. Marc's holding company, subject to corporate income tax, acquired two lines of equity securities in 2019, recorded in its equity securities account. In 2026, it sells line A with a capital gain of €2,000,000 and line B with a capital loss of €500,000. Assumptions: the securities are eligible for the 0% % rate, there are no other sales, and the share is taxed in full at 25% %.

Issue. What corporate income tax does the holding company pay on these two sales?

Strategy. Apply the three steps in order: compensation, withdrawal of the net amount to 0 %, share on the gross amount.

Result.

Incorrectly calculated on the net capital gain, the share would be €180,000 and the corporate income tax €45,000, a difference of €15,000. The BOFiP (French tax authority) uses the gross amount.

For comparison, the same net capital gain of €1,500,000 on securities excluded from the regime would be taken into account at the standard rate, i.e. €375,000 of corporate income tax at 25% of the 13th tax year.

This profile is fictitious and its amounts are hypothetical. The calculation ignores the reduced rate of 15% of taxable income (%), the additional contribution of 3.3% of taxable income (%), other holding company results, and the partner's tax liability. It does not reflect your specific situation.

What changes depending on your situation

• The classification of securities and their holding period, with regard to the two years, and the possible registration in the sub-account "Securities subject to the long-term capital gains regime".
• The nature of the company being sold : real estate predominance, non-cooperative state or territory, portfolio management.
• The existence of a tax deferral or suspension on the transferred securities.
• Membership in a tax group and the corporate income tax rate applicable to the share.
• The location of the subsidiary and the applicable tax treaty.

The rule depends on your situation. No results are guaranteed.