Stock options: taxation of the gain on exercise and the capital gain on sale

A stock option gives the right to buy or subscribe to shares of one's employer at a predetermined price. Its tax treatment depends on the grant date: up to September 27, 2012, or from September 28, 2012 onwards. For options granted since that date, the gain from exercising the option (the actual value of the share at exercise minus the price paid) is included in the progressive income tax scale, under wages and salaries. It is taxed upon the sale of the shares and is subject to a 10% employee contribution.

This page deals with capital gains and capital gains on the sale of shares for an individual domiciled in France. It does not calculate tax according to the tax brackets, does not provide box numbers, and does not detail non-qualified plans or the fixed allowance of €500,000.

Two gains to distinguish

The exercise price is fixed at the grant and does not depend on the value of the security at the time of issue (BOFiP).

The special regime only applies to the options of "qualified" plans (articles L. 225-177 to L. 225-186 of the commercial code).

Options granted from September 28, 2012

• Progressive scale. The gain from raising is taxed according to the rules for salaries and wages (BOFiP BOI-RSA-ES-20-10-20-20, § 343, which refers to article 197 of the CGI).
• Tax year. The gain is taxed in the year of the disposition, transfer, conversion to bearer form, or leasing of the securities. The provision also applies to transfers free of charge (§ 213).
• Salary contribution of 10 %. It is based on the capital gain due on the day of the sale of the securities, declared in a specific box of the 2042 C declaration, and not deductible from the taxable income base (BOFiP BOI-RSA-ES-20-30, version of 21/05/2026).
• Social security contributions. impots.gouv.fr indicates 9.7 % (9.2 % of CSG and 0.5 % of CRDS) for options granted since 28/09/2012. Check the rate for the year of your transfer.

Options granted up to September 27, 2012

The table follows the pages of impots.gouv.fr and the BOFiP.

Key points to remember for this period:

• Unavailability. The shares remain registered and unleased for four years from the date of allocation (five years before April 27, 2000). If they are converted to bearer shares, leased, or sold before then, the gain is taxed as wages and salaries, with an automatic averaging (BOFiP BOI-RSA-ES-20-10-20-30).
• Carrying. It lasts two years, counted at the earliest from the expiry of the period of unavailability (BOFiP BOI-RSA-ES-20-10-20-20, § 260).
• The threshold of €152,500. It is assessed per beneficiary and per year, across all plans. Gains at reduced rates are first deducted from the threshold (BOFiP BOI-RSA-ES-20-10-20-20, § 310 to 330).
• The option for the pricing scale. It is possible in the declaration, without quotient; the CSG is then not deductible (§ 270, 280, 300).
• Social charges. impots.gouv.fr indicates 18.6 % for options granted before 28/09/2012. The employee contribution rate for this period is not indicated here: to be verified with the source.

For an allocation at the end of September 2012, the exact switchover date should be verified with the source.

The discount

The company may grant a discount of up to 20 % on the average share price of the 20 trading days preceding the grant (impots.gouv.fr, "Employee Shareholding," amended on April 8, 2026). For a listed company and stock options, the BOFiP (French Official Tax Bulletin) sets the exercise price at least 80 % of the average share price of the 20 trading days (call options are subject to a separate rule). For a non-listed company, no discount has been permitted since May 17, 2001 (BOFiP BOI-RSA-ES-20-10-10).

The portion of the discount that does not exceed 5% of the share value is tax-exempt. The excess, the "excess discount," is taxed as salary in the year it is issued. Example from the official website: 100 shares offered at €200 when their value is €300; excess discount of €85 per share, resulting in €8,500 in salary and wages.

Capital gain on sale

According to impots.gouv.fr, capital gains on disposal are taxed at a rate of 12.8% (%) or, by option, according to the progressive tax scale. The BOFiP (Official Bulletin of Public Finances) classifies them under the capital gains regime for securities (Article 150-0 A of the French General Tax Code). The holding period allowance applies to this capital gain, not to the gain on exercise: according to impots.gouv.fr, it can apply to securities acquired before 2018 if the progressive tax scale is chosen, and cannot be combined with the fixed allowance. A capital loss on disposal, when the sale price is lower than the exercise value, is offset against the gain on exercise, up to the amount of that loss.

impots.gouv.fr also mentions a fixed allowance of €500,000 for SME managers retiring (shares held for at least one year); its conditions are not detailed here.

Declare the winnings

The gain from exercising the option must be reported on form 2042 C. The company will provide an individual statement no later than March 1st of the year following the exercise. You should keep this statement and present it upon request; it no longer needs to be attached to the tax return (BOFiP BOI-RSA-ES-20-10-20-40).

Employees and managers who change countries

The BOFiP (French Official Tax Bulletin) treats the gain from exercising the option as employment income, taxable in the country or countries where the activity rewarded by the option was exercised, prorated to the number of days worked during the reference period. A non-resident is taxable in France on the portion related to work carried out in France, with possible withholding tax (BOFiP BOI-RSA-ES-20-10-20-60).

Stock options: what changes depending on your situation

• The date of allocation, and the qualified nature of the plan.
• The date of transfer, which determines the tax year.
• For older options, respecting unavailability and portability.
• The countries where the activity was carried out during the reference period.

The employer's shares are equity securities: their value can fall between issuance and sale, potentially resulting in a capital loss. No results are guaranteed.

Stock options: a numerical example (fictitious profile)

Situation. Hélène, 44, an executive at a publicly traded company, received stock options for 2,000 shares in 2019, priced at €40 each, as part of a qualified plan. She exercised them when the share price reached €100 and sold the shares the same year at €130. No discount was granted.

Issue. What amounts are taxed, and which can be calculated without knowing the 2026 tax scale?

Strategy. Separate the two gains: the capital gain (tax brackets, employee contribution of 10 %) and the capital gain on disposal (12.8 %, without opting for the tax brackets). This example excludes income tax at the tax brackets and social security contributions.

Result.

The two quantifiable items total €19,680, to which are added the tax on the capital gain of €120,000 according to the scale and social security contributions.

Second illustration, options allocated in 2010. Capital gain of €200,000, taxed in the year of the sale, without opting for the tax brackets and without any other capital gain being taxed in the same year (the threshold is assessed per beneficiary and per year, across all plans). Four years of unavailability: 30 % × €152,500 + 41 % × €47,500 = €65,225. With an additional two years of carrying: 18 % × €152,500 + 30 % × €47,500 = €41,700. The difference is €23,525, excluding employee contributions and social security contributions.

Fictitious profiles, hypothetical values. They do not predict your situation.