Free Shares (AGA) in France 2026: Tax Treatment, Conditions and Implementation Guide

Free Share Awards — known in France as Attributions Gratuites d'Actions (AGA) — are one of the most effective tools for aligning the interests of employees and executives with company performance. Governed by Articles L. 225-197-1 et seq. of the French Commercial Code, they allow companies to grant shares to selected beneficiaries at no cost, after a defined vesting period.

Any société anonyme (SA) or société par actions simplifiée (SAS) can set up an AGA plan, regardless of age, size, or listing status. Eligible beneficiaries include:

• Employees of the granting company or its subsidiaries;
• Executives classified as assimilés-salariés: chairman/CEO of an SA, president of a SAS, minority or equal managing partners of a SARL (provided they are affiliated to the general social security scheme).

Excluded: self-employed individuals (TNS), majority managing partners of SARLs, and individuals with no employment or executive mandate.

The total number of shares granted cannot exceed 10% of the company's share capital at the date of grant (15% for companies with fewer than 50 employees or for board-level grants only).

Since the Macron Act (2015), the minimum vesting period is one year. The mandatory conservation period was abolished by the PACTE Act (2018), meaning beneficiaries can sell immediately after vesting — though waiting at least 2 years post-vesting unlocks significant tax and social advantages.

In practice, most plans use a 2–4 year vesting schedule, often with a one-year cliff followed by monthly or annual vesting.

Acquisition gain (value of shares at end of vesting):

• Taxed as employment income under the progressive income tax scale for amounts up to €300,000/year;
• A 50% allowance applies if shares are held for at least 2 years after vesting;
• Amounts above €300,000 are taxed at the full marginal rate plus standard payroll contributions;
• CSG/CRDS social levies apply at 9.7% on the full gain;
• A specific employee contribution of 10% (reduced to 7.5% if held > 2 years) is also due.

Disposal gain (profit on sale after vesting):

• The acquisition price for CGT purposes equals the share value at the end of vesting;
• The gain is subject to the 30% flat tax (PFU) (12.8% income tax + 17.2% social levies), or the progressive scale on an opt-in basis.

The granting company owes a specific employer contribution when shares are definitively attributed:

• 20% of the acquisition gain in the general case;
• 10% for SMEs with fewer than 250 employees and annual turnover below €50M (or balance sheet below €43M), provided the vesting period is at least 3 years.

This contribution is tax-deductible for the company, reducing its effective cost. For an SME taxed at 25% corporate tax rate, a 10% contribution has a net cost of approximately 7.5%.

BSPCE (Bons de Souscription de Parts de Créateur d'Entreprise) are restricted to unlisted companies under 15 years old, with specific ownership criteria (at least 25% held by individuals or non-institutional funds) and equity below €150M. Their tax treatment is more favourable (purely capital gains, subject to 30% PFU), but eligibility is far more restrictive. AGA are accessible to any SA/SAS and offer a broader beneficiary scope, making them the preferred instrument for established companies.

1. Extraordinary general meeting (AGE) authorisation;
2. Board of directors / supervisory board decision defining beneficiaries and terms;
3. Drafting of the plan rules (good/bad leaver clauses, acceleration on change of control);
4. Share buyback or reserved capital increase;
5. Individual notification to beneficiaries;
6. IFRS 2 accounting charge spread over the vesting period;
7. At vesting: definitive share transfer, URSSAF employer contribution declaration and payment, beneficiary tax reporting obligations.

Given the legal and tax complexity of AGA plans, companies should engage a specialised accountant and corporate lawyer from the design phase — particularly to model the financial impact (employer contribution, IFRS 2 charge, dilution), simulate tax scenarios for beneficiaries, and ensure full compliance with URSSAF reporting requirements. At Hayot Expertise, our team assists both companies implementing AGA plans and beneficiaries in optimising their tax position.