Employee shareholding

BSPCE Taxation: When Are You Taxed and at What Rate?

BSPCE tax: acquisition gain vs capital gain, income tax rate (12.8% or scale), social contributions and tax filing requirements.

Geoffroy Andriamaholison
Jun 29, 2026

💡 Warning

This article is the result of automatic translation, the accuracy and fidelity of the translation are therefore not guaranteed. To consult the original version of this article, in French, click here.

 

Often overlooked, BSPCEs (startup founder share subscription warrants) are a widely used equity incentive mechanism in startups and scale-ups. Their main advantage lies in a tax and social security framework that is generally more favorable than other options (bonus shares, stock options), provided that specific rules are followed. 

Note: The BSPCE regime was revised by the 2025 Finance Act and subsequently amended again by the 2026 Finance Act (regarding eligibility requirements and the scope of beneficiaries, particularly within certain corporate groups).

In this guide, you will find:

  • what BSPCE entails for the issuing company,
  • when and on what the beneficiary is taxed,
  • an overview of the applicable tax rates and key considerations,
  • reporting requirements for both the company and the beneficiary.

💡 Key takeaways

  • In principle, the issuing company is not liable for any specific employer contribution solely as a result of the grant and exercise of BSPCE, unlike certain other schemes.

  • The beneficiary is taxed when selling the shares resulting from the exercise, not at the time of grant or, in principle, upon exercise. The applicable regime depends in particular on the issue date and the beneficiary’s length of service, with social security contributions applying at a rate to be confirmed as of the publication date.

  • Since 1 January 2026, new rules may affect eligibility and intra-group grants — e.g. extension to sub-subsidiaries — and should therefore be taken into account when structuring plans. (2026 Finance Act)

  • Reporting obligations apply to both the company and the beneficiary: it is best to anticipate them from the exercise stage.

 

For the issuing company: no cost

Unlike other employee stock ownership plans (stock options or free shares), the issuing company (or, where applicable, the beneficiary’s employer in the case of an intra-group grant) is, in principle, not liable for any specific contribution in connection with BSPCE grants. (CGI, Art. 163 bis G — Legifrance)

Furthermore, the issuance of BSPCE shares generally has no tax implications for the company solely as a result of the grant, exercise, or sale of shares subscribed to following the exercise of the warrants.

 

For the beneficiary of the securities: an attractive tax regime

The tax treatment of BSPCE warrants is generally advantageous for the beneficiary in several respects:

  • the timing of taxation,
  • the tax base (what is taxed),
  • the tax rate, depending on the circumstances.


When is the beneficiary taxed?

Taxation occurs following the sale of the shares subscribed to upon the exercise of the BSPCE options. No tax is due prior to this sale—neither at the time of grant nor at the time of exercise. 

This is a significant advantage: the beneficiary pays tax only after realizing a capital gain. 

The calculation rules are generally presented as follows: taxation applies to the net capital gain on the sale, calculated as the difference between:

  • the sale price of the securities (net of any fees and taxes paid),
  • and their subscription price at the time the warrants are exercised (purchase price). 

 

What is the applicable tax rate?

Article 163 bis G of the General Tax Code governs the tax treatment of gains related to BSPCE warrants. 

In practice, the applicable tax regime depends, in particular, on:

  • the date of issuance or grant of the BSPCE options,
  • the beneficiary’s length of service with the company as of the date of sale,
  • and the rules in effect on the date of sale.

There are two income tax rates applicable to the capital gain on the sale: a standard rate and a higher rate.

  • Standard Rate
    • The standard rate applies only if, on the date of sale, the beneficiary has been working for the company for at least three years.

      Important: As of January 1, 2026, the rules for determining length of service (the three-year threshold) may, in certain cases, take into account periods spent with the issuing company, a subsidiary, or an eligible sub-subsidiary, depending on the group’s ownership structure.


  • Increased Rate
    • The increased rate applies when the conditions for the standard rate are not met, particularly if the beneficiary has been employed by the company for less than three years as of the date of the stock transfer. 

The gain is subject to two separate taxes:income tax (IR) and social security contributions (PS).

Summary:

beneficiaires


Example: Determining the tax rate based on the beneficiary’s length of service. 

 

Some Limitations

It is generally not possible to combine the benefits of BSPCEs with other savings vehicles: BSPCEs cannot be included in a PEA or in certain employee savings plans, and the same applies to shares acquired through the exercise of BSPCEs.

 

Reporting Requirements

The issuing company and the beneficiaries are subject to separate reporting requirements. These requirements are set forth, in particular, in Article 41 V bis of Annex III of the CGI.

 

For the company issuing BSPCE options: an individual statement and the DADS

The company must prepare an individual statement to be provided to each beneficiary who has exercised their BSPCE options. (Annex III of the CGI, Art. 41 V bis — Legifrance)

The information to be included is as follows:

  • company name and registered office,
  • the beneficiary’s name and address,
  • date of acquisition of the warrants,
  • number of shares acquired and purchase price,
  • dates, number, and purchase price of the securities,
  • proportion of the gain derived from French sources,
  • the beneficiary’s length of service as of the exercise date.

In the individual statement, the company also certifies that the warrants were issued and granted in accordance with the conditions set forth inArticle 163 bis G of the CGI.

The filing must be submitted “no later than March 1 of the year following the fiscal year.”

Finally, the issuing company must submit the information to the tax authorities via a DSN declaration.

 

For the recipient of the shares: income tax return for the year of sale

Beneficiaries must report on their income tax return the amount of the net capital gain from the sale and the year of the sale of the shares, in accordance with the conditions set forth inArticle 150-0 A of the CGI. 

The recipient must retain the individual statement provided by the company and be able to present it upon request by the tax authorities during the applicable review period.

Finally, in the event of an omission in the tax return, identified inaccuracies, or failure to submit a required statement, fines may apply. 

 

Conclusion

BSPCEs can be a highly effective tool for employee equity participation, but their value depends on strict compliance with the program’s conditions, an understanding of the tax timing, and proper reporting procedures on both the company’s and the beneficiary’s sides.

 

 

Sources

  1. CGI Art. 163 bis G (BSPCE regime) — Legifrance
  2. Appendix III, CGI Art. 41 V bis (reporting requirements related to BSPCE) — Legifrance
  3. French General Tax Code (CGI) Art. 87 (social security filings, including the DSN, as applicable) — Legifrance
  4. CGI Art. 150-0 A (general framework for capital gains on the sale of securities) — Legifrance
  5. BOFiP (administrative doctrine, commentary, and practical guidance) — portal
  6. Analysis article (monitoring): Gide — “Taxation of BSPCE: Impact of the 2026 Finance Act”
  7. BSPCE Kit - Updated for 2026 - Galion

 

Are BSPCE taxed at the time of grant?

In principle, no. Taxation occurs when the shares resulting from the exercise are sold.

How is the taxable capital gain calculated?

In practice, the net capital gain on disposal generally corresponds to the difference between the sale price — net of costs — and the subscription price paid upon exercise.

Can BSPCE be held in a PEA?

No. BSPCE cannot be held in a PEA. In addition, the shares obtained through the exercise of BSPCE cannot be held in a PEA either.

How do I report gains from BSPCEs on my income tax return?

Gains from the sale of shares acquired through BSPCEs must be reported in the tax year in which the shares are actually sold. They are declared on Form 2074 (capital gains) and, depending on their nature, in the relevant sections of the Form 2042 income tax return. Equify recommends consulting a certified accountant or tax advisor to ensure the correct allocation between the exercise gain and the capital gain on sale, as these may need to be reported in different sections.

What is the difference between the exercise gain and the capital gain on sale for BSPCEs?

The exercise gain is the difference between the fair market value of the shares at the time the BSPCEs are exercised and the fixed exercise price set when the BSPCEs were granted. The capital gain on sale is the difference between the sale price of the shares and their fair market value on the exercise date. These two gains are calculated and taxed separately, under different tax rules depending on your circumstances.

When am I taxed on my BSPCEs: upon exercise or upon the sale of the shares?

Taxation occurs in two stages. When you exercise your BSPCEs (i.e., convert them into shares), you realize an exercise gain, equal to the difference between the fair market value of the shares on the exercise date and the exercise price. However, this gain becomes taxable in the tax year in which you sell the shares, not in the year of exercise. The capital gain on sale is calculated when the shares are sold and is taxed separately.

What reporting obligations does the issuer have toward beneficiaries after the grant?

The issuer must provide each beneficiary with a summary document setting out the number of BSPCEs granted, the exercise price, the vesting conditions, and the exercise conditions. This information is generally included in the BSPCE plan rules or in an individual grant letter. Equify also recommends informing beneficiaries of the reference value of the shares at the time of the grant.

When is a BSPCE beneficiary actually taxed on their gains?

Taxation does not occur when BSPCEs are granted or exercised, but when the shares acquired upon exercise are sold. At that point, both the exercise gain (the difference between the fair market value of the shares on the exercise date and the exercise price) and the capital gain on sale (the difference between the sale price and the fair market value of the shares on the exercise date) are calculated and reported for tax purposes.

 

 

 
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