BSPCE Taxation in 2025

Taxation Differences Based on Attribution Date

BSPCE taxation has fluctuated significantly and depends on the option attribution date. It's now necessary to distinguish between BSPCE granted before 2018, those granted after 2018, and "management package" BSPCE exercised after 2024, which are not subject to the same tax rules. The more favorable rules before 2018 have been modified since then, making taxation less advantageous for recent attributions.

So, what is the tax rate for BSPCE granted before and after 2018?

Granted before January 1, 2018:

• Less than 3 years of seniority in the company at the time of sale: Gains are subject to a flat rate of 30%, plus social contributions of 17.2%, for a total rate of 47.2%.
• More than 3 years of seniority: Gains benefit from a reduced rate of 19% for income tax, plus social contributions of 17.2%, for a total rate of 36.2%.

Granted from January 1, 2018:

• Less than 3 years of seniority in the company at the time of sale: Gains are subject to a flat rate of 30%, plus social contributions of 17.2%, for a total rate of 47.2%.
• More than 3 years of seniority: Gains are subject to the flat tax of 30% (or optionally to the progressive income tax scale), comprising 12.8% income tax and 17.2% social contributions.

In 2025, these rules remain in effect, except for "management package" BSPCE exercised from January 1, 2025.

What Changed with the 2025 Finance Law

• New tax regime applicable to "Management Package" BSPCE granted under "management packages" (art. 163 bis H CGI)
• End of tax deferral/suspension when contributing to a holding company
• Exclusion of shares derived from BSPCE from PEA

1. Special Regime for Management Package BSPCE Exercised from January 1, 2025:

The tax regime applicable to "Management Packages" (see Bofip BOI-RSA-ES-20-60) can also concern BSPCE granted to employees or executives in exchange for their functions in operations allowing capital gains redistribution by investors based on achieved performance criteria (ratchet mechanism).

It's necessary to distinguish between exercise gain and sale gain.

The exercise gain (or acquisition gain) is taxed differently based on seniority as previously:

• Less than 3 years of seniority in the company at the time of sale: Gains are subject to a flat rate of 30%, plus social contributions of 17.2%, for a total rate of 47.2%.
• More than 3 years of seniority: Gains are subject to the flat tax of 30%, comprising 12.8% income tax and 17.2% social contributions.

The sale gain is taxed according to employment income rules, and only by exception in the capital gains category (flat tax) for the portion of the sale gain below 3 times the company's financial performance. Income tax is supplemented by social contributions at 10% (paid by the beneficiary), and possibly the exceptional contribution on high incomes (up to 4%).

How is the financial performance threshold for BSPCE capital gains calculated?

Ceiling of gain subject to flat tax = Attribution value of shares × 3 × (Real value of the company at sale / Real value of the company at BSPCE subscription) × exercise gain - Attribution value of shares.

This means the ceiling is determined by multiplying by 3 the ratio between the company's value at the time of sale and its value when you acquired or exercised your BSPCE.

In summary: The performance threshold is based on a 3x multiple applied to the ratio between the company's real value at the sale date / the company's real value at the exercise date.

In practice, the 30% flat tax will apply to 100% of shares if exercise occurs at the time of sale.

Impact of the 2025 Finance Law on Management Package BSPCE Taxation

We understand from this new tax regime that the key criterion is the enterprise value at the BSPCE management package exercise date. We have thus modeled the applicable tax regime based on enterprise value at the exercise date. We observe a 30% flat tax if Management Pack BSPCE are exercised close to the attribution date or sale date, and partial income tax between these two moments:

Access our simulator to calculate the tax cost of the 2025 finance law.

Exercising Your BSPCE: 30% Flat Tax or Progressive Scale?

Beneficiaries - present in the company for at least 3 years - can choose between two tax options for taxing their gains. The choice will depend on the beneficiary's income and the most advantageous taxation for them.

💡Good to know: If as an employee, your taxation falls in a low or moderate tax bracket (for example, in the 0% or 11% brackets), choosing the progressive scale may be advantageous, as the tax will be lower than the flat tax, and will allow you to deduct 6.8% of CSG.

Conversely, if your taxes place you in a higher income tax bracket (for example, above 30%), the 30% flat tax may be more interesting, as it limits tax to a fixed rate and avoids paying at a higher rate using the progressive scale.

Exercising Your BSPCE: Account for Social Contributions

In addition to capital gains tax, gains from BSPCE sales are subject to social contributions at 17.2%. This is added to income tax, which impacts the net amount received by the beneficiary.

Special case for Management Packages: BSPCE qualified as management packages acquired from January 1, 2025 are subject to a performance threshold. This is calculated by multiplying by 3 the ratio: Real value of the company at sale / Real value of the company at acquisition or subscription. Beyond this threshold, salary is taxed at the income tax scale, plus 10% social contribution paid by the employee on their capital gain, and up to 4% for the exceptional contribution on high incomes (CEHR).

Are You in a Special Case?

BSPCE taxation can be different in certain special situations. For example, departure before three years, retirement, or expatriation can lead to modifications in the applied tax regime, sometimes with additional advantages or constraints. Analyze these cases with a specialized law firm to avoid any poor tax optimization.

2. End of Tax Deferral/Suspension When Contributing to a Holding Company

Former regime – contribution of shares without immediate taxation: Before 2025, a founder or employee holding shares (resulting for example from BSPCE exercise) could contribute these shares to a holding company without immediate taxation. Indeed, the French tax regime provided for a suspension or deferral of taxation during share exchanges meeting certain conditions, which neutralized the latent capital gain until a subsequent sale. The tax administration contested this advantage for BSPCE in 2023, but the Council of State intervened in early 2024 in favor of taxpayers: in a decision of February 5, 2024, it ruled that the contribution of shares derived from BSPCE to a holding company could benefit from the tax neutrality regime (tax suspension, or even deferral by analogy). In other words, until then, it was possible for an executive to place their shares in a holding company without immediately triggering capital gains tax, despite the absence of liquidity generated by the operation.

New rules of the 2025 finance law: The 2025 finance law came to challenge this possibility of tax deferral when contributing to a holding company. Concretely, the contribution of shares to a holding company becomes taxable in the year of contribution, including on the latent capital gain, even if the contributor receives no liquidity in exchange.

Implications for founders and BSPCE holders: In practice, this elimination of tax suspension/deferral for contributions greatly reduces the interest in housing startup shares in a personal holding company. Certainly, the law does not formally prohibit making such a contribution, but the immediate tax burden generated can constitute a major obstacle to this type of restructuring.

3. Exclusion of Shares Derived from BSPCE from PEA

Context – the debate on BSPCE and PEA: The Plan d'Épargne en Actions (PEA - stock savings plan) is a tax-exempt securities account allowing European shares to be held; gains made there are exempt from income tax after 5 years of holding (only social contributions remain due). Historically, BSPCE and shares obtained by exercising them were excluded from PEA – a prohibition established by administrative doctrine. However, in a decision of December 8, 2023, the Council of State authorized the registration of shares derived from BSPCE in a PEA, against the opinion of the tax administration. Following this decision, the administration temporarily adjusted its position (BOFIP update of May 16, 2024) to comply with the judge, thus opening the door to using PEA to shelter BSPCE shares and benefit from its advantageous tax regime (notably income tax exemption on capital gains after 5 years). Many entrepreneurs saw this as a way to reduce taxation of their BSPCE gains by housing them in a PEA.

Change made by the 2025 finance law: The window was short-lived. Article 92 of the 2025 finance law clarified the situation by reinstating the prohibition in law. From now on, it is explicitly prohibited to place BSPCE, as well as shares derived from their exercise, in a PEA. In other words, BSPCE are no longer among the securities eligible for PEA.

Conclusion: Adapting BSPCE Strategy to New Tax Rules

BSPCE taxation in 2025 evolves to offer greater transparency, standardize taxation of gains received by employees and executives, and guarantee a clearer legal framework. For beneficiaries, good mastery of these new rules is essential to effectively adapt their financial and tax strategy. Founders and business creators must be aware of these changes to optimize BSPCE attribution and maximize tax advantages for themselves and their teams. Good evaluation of BSPCE shares and understanding of BSPCE vesting mechanisms will help you make the best strategic decisions for your startup's future.

You now know everything about the repercussions of the 2025 Finance law on BSPCE valuation.

Know that Sovalue supports you in defining the price of your startup's BSPCE at their fair value.

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