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France: Year-End Tax Reporting Obligations for Employee Share Plans

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Employer reporting obligations relating to French-qualified awards

For French-qualified1 stock options or BSPCEs2 exercised in 2024 and French-qualified RSU vested in 2024, the French employer must prepare an individual statement with the exercise / vesting data to be provided to the beneficiary no later than March 1, 2025.

This individual statement has to be used by the beneficiary to report their taxable income in their French annual income tax return due in May / June 2025 if they have sold the shares acquired pursuant to the awards in 2024, and, if requested, the beneficiary must provide it to the French tax authorities.

In addition, a special report for French-qualified stock options and RSU may have to be prepared by the French employer,3 together with the French corporate documentation relating of the 2024 fiscal year. This report must be ready at the same time as all of the corporate documentation for the annual meeting of the shareholder(s) of the French entity. The date of the meeting depends on each company.

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1To be French-qualified, awards must be granted under a French sub-plan to the parent company plan and subject to specific conditions as provided for by the French commercial code. French-qualified awards are able to benefit from special (usually favorable) tax and social security contribution treatment.

2 BSPCE refers to « bon de souscription de parts de créateur d’entreprise » a special kind of qualified stock option available to start-up companies and likewise subject to favorable tax and social security contribution treatment in France. 

3 Provided the French employing entity is organized as a SA or SAS.
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 How we can help: Employer reporting obligations

We can assist you with preparing the individual statements for French-qualified awards exercised / vested in 2024. Our assistance may consist of:

  • Helping you to gather the relevant information that must be included in the individual statement;
  • Reformatting the data into a usable single excel document; and
  • ​Preparing the individual statement for each beneficiary ready to be sent. 

Employee reporting obligations relating to French-qualified awards

As a French tax resident, a taxpayer is required to report their worldwide income (i.e., French and foreign sourced), while a non-French tax resident is required to report only French sourced income. The deadlines for filing the French income tax return for the 2024 French fiscal year (January 1 to December 31, 2024) will be in May / June 2025.
 
Reportable 2024 income must include any taxable income derived from equity awards (e.g., ESPP discount, French qualified and non-qualified stock option, BSPCE and RSU income).

 How we can help: Employee reporting obligations

We can assist your employees with reporting their 2024 equity income and gains in the relevant forms of the French annual income tax return. Depending on the nature of the income / gains, the amounts and the tax and social regime applicable to the income/gains, there are specific forms and specific boxes in these forms to be completed.
 
The income tax due by employees is calculated on the basis of the information provided in the forms – therefore, the forms have to be carefully completed. Often, employees have a significant amount of questions related to the completion of their tax forms. 
 
We prepare a step-by-step guide to help employees report their 2024 equity gains, including:

  • Description of the nature of each type of awards;
  • Description of the tax and social regime applicable to each type of awards;
  • Explanations of how to calculate the equity income / gains to be reported (i.e., method to determine the taxable amount upon vesting / exercise / settlement / sale of the underlying shares, including for mobile employees);
  • Explanations of how and where to report the calculated taxable amounts in the relevant forms / boxes; and
  • Explanations of how and where to disclose any foreign bank and share account for French tax residents.

We can also organize a live session to go through the step-by-step guide together with the employees and respond to their questions. The information provided is general and does not constitute individual employee tax advice. Our fee will vary depending on the number of employees, types of awards, and service required. 

To obtain a fee proposal, contact our Paris colleagues, Agnès Charpenet and Emilie Suryasumirat, or your Compensation attorney for support.
 

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Agnès Charpenet joined Baker McKenzie Paris office in December 1998, was promoted to partner in 2017 and elected principal in 2020. She leads the Employee Benefit and the Wealth Management practices in the Paris Office. Agnès advises companies of all sizes, from startups to multinational corporations and their executives, on legal and tax aspects on remuneration structuring, employee share plans, management packages, in France and worldwide. She also assists French and foreign private clients, on investment strategy, mobility, estate planning and tax compliance. She represents clients in tax and social security audits and disputes. Agnès is co-leader of the Baker McKenzie's European Employee Benefit Practice Group. In 2005, she spent six months in the Global Equity Services group of the San Francisco office. She is involved in the Women Initiatives Committee in Paris.

Author

Emilie Suryasumirat is a senior associate in Baker McKenzie's Paris office. Emilie advises companies of all sizes, from startups to multinational corporations and their executives, on legal and tax aspects on remuneration structuring. Her practice focuses on compensation of employees and key executives including employees share schemes launched by French and foreign multinational companies and governance, management packages, international mobility and social security legislation. She also advises private clients on wealth management matters.

Author

Barbara Klementz is the chair of Baker McKenzie’s North American Compensation Practice. She has practiced in the area of global equity and executive compensation for over 20 years. Barbara is a Thomson Reuters Stand-out Lawyer for 2024 and recognized as a ranked practitioner by Legal 500 for Employee Benefits: Transactional and by Chambers USA. Client feedback in Chambers states that "Barbara is absolutely phenomenal" and "Barbara is incredibly impressive in terms of expertise and the ability to be pragmatic and practical. She knows the laws and rules in a staggering number of countries." Barbara is admitted to private practice in California and Düsseldorf, Germany. Barbara focuses her practice on global equity compensation programs, executive compensation and employee benefits. She regularly advises multinational companies on implementing their equity compensation and other incentive programs worldwide – particularly as it relates to tax and securities law matters and exchange control regulations. Barbara also frequently advises on the treatment of such programs in corporate transactions, including mergers and acquisitions, spin-offs and divestitures, as well as on the tax treatment of cross-border employees participating in such programs.

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