Free shares (AGA) in France: how they are taxed in 2026

Free share awards are an increasingly common form of remuneration in French companies, particularly in startups and listed large-caps. Their tax treatment is a departure from ordinary law — and favourable, provided the legal conditions are met.

What is a free share award?

A free share award (attribution gratuite d'actions, AGA) is a mechanism by which a company grants shares to its employees or officers without any financial consideration. The award is subject to a vesting period and, often, to a holding period after vesting.

The legal framework is set by article L. 225-197-1 of the French Commercial Code, with a specific tax regime codified in the CGI.

The two taxable events

1. Definitive acquisition of shares (end of vesting)

This is the moment when you become the owner of the shares. The acquisition gain — equal to the value of the shares at that date — constitutes taxable income.

For awards made since 31 December 2016, this gain is taxed in the category of employment income (traitements et salaires), after a 50% allowance (up to €300,000).

Above €300,000, the gain is taxed without allowance under the progressive scale.

It is also subject to social levies at 18.6% for the fraction not exceeding €300,000. For the fraction exceeding €300,000, social levies amount to 9.7%, plus a 10% employee social contribution.

2. Sale of shares

When you sell the shares acquired under the plan, you realise a capital gain equal to the difference between the sale price and the value of the shares at the date of acquisition (which constitutes your tax cost basis).

This capital gain is taxed under the standard securities capital gains regime: flat tax at 31.4% (12.8% income tax + 18.6% social levies) or option for the progressive scale.

The 50% allowance: conditions

To benefit from the 50% allowance on the acquisition gain, the plan must meet the legal conditions:

• Minimum vesting period: 1 year (since the Loi Macron 2015, reduced to 1 year for post-2016 plans)
• Minimum holding period: 1 year after vesting (for post-2017 plans)
• Shares must be issued by the employing company or an affiliated company

If the plan does not meet these conditions, the acquisition gain is treated as ordinary salary, without allowance.

Employer and employee social contributions

The employer is liable for a specific employer contribution on awards (rate varies depending on the plan date and SME/large company status). This contribution is due at the time of award, not at vesting.

The employee bears employee social levies on the acquisition gain.

Disposal strategy

If you hold shares acquired under a free share plan, the date of disposal has a significant impact:

• Selling before the end of the mandatory holding period: loss of the favourable regime, full salary taxation
• Waiting until the end of the holding period: acquisition gain taxed with 50% allowance + flat tax on the capital gain
• If you anticipate a significant increase in value, assess the timing of disposal against your overall tax situation for the year

Filing

• The acquisition gain is pre-filled by the employer on your return in certain cases, but always verify: errors on the tax base or social levy rates are common
• Reported on form 2042 C (French-source income)
• The capital gain on disposal follows the standard route (form 2042, boxes dedicated to securities capital gains)

Acquisition gain, allowance, disposal: three steps, three places on your return

The filing treatment of a free share award involves several forms and several steps, which vary depending on the plan date and the amount of the gain. If your employer has pre-filled certain fields, check them: errors on AGA returns are among the most common in pre-filled returns.

Fidencia.tax guides you through your return based on the date of your plan award, the amount of the gain, and whether you sold the shares during the year.

Verify and complete your AGA return — fidencia.tax

This article is provided for informational and educational purposes only. It does not constitute tax, legal, or financial advice. The rules presented are general in nature and may not apply to your personal situation. Consult a qualified professional (chartered accountant, tax lawyer, wealth management adviser) for any tax decision. Fidencia.tax is a filing assistance tool and does not replace professional advice.

Legal references: CGI articles 80 quaterdecies, 200 A §3; art. L. 225-197-1 French Commercial Code; 2026 DGFiP Income Tax Guide (boxes 1TT, 1UZ, €300,000 threshold).