Restricted stock units are a promise by your employer, or more often by its foreign parent company, to deliver shares once a vesting period has run. Most US plans are not qualified by default. A group can, however, adopt a French sub-plan that follows the French free share rules, and the result for you then changes markedly. Your grant documents, or your HR team, will tell you which one applies to you.
01If your plan is not qualified
Without a French sub-plan, the value of the shares on the vesting date is treated as employment income, much like a cash bonus paid that day. It is taxed in the year the shares vest, even if you keep them.
That value is added to your salary and taxed at the progressive personal income tax (PIT) rates, which reach 45%. High earners may also owe the exceptional contribution on high incomes. Employee social security contributions are due on the same amount, and your French employer pays its own employer contributions on top.
When the French employer reports the amount through payroll, withholding tax is deducted from your pay in the month the shares vest. Otherwise, the tax is collected through instalments. If the broker sells part of the shares at vesting to cover tax, that sale is a separate event for French tax purposes.
02If your plan is qualified
Under a qualified plan, vesting triggers no tax for you. The value of the shares on the vesting date becomes your acquisition gain, but it is only taxed in the year you sell the shares or give them away.
For plans authorised since 1 January 2018, the acquisition gain is generally taxed as follows:
- up to €300,000 a year, half of the gain is exempt from PIT and the other half is taxed at the progressive rates, while social surtaxes of 18.6% apply to the full amount;
- above €300,000, the gain is taxed like salary, with social contributions on earned income of 9.7% and a specific employee contribution of 10%.
The €300,000 threshold is assessed each year, across all the qualified gains you realise. Spreading sales over several years can therefore keep more of the gain within the 50% allowance. Plans authorised before 2018 follow earlier rules. For a foreign group, the relevant date is the one on which its competent body authorised the plan, not the date of the French sub-plan.
03When you sell the shares
The sale is taxed as a capital gain on the increase in value since vesting. The gain is the sale price minus the value of the shares on the vesting date, since that value has already been taxed as income or as the acquisition gain.
The capital gain is subject to the 31.4% flat tax, made up of 12.8% PIT and 18.6% social surtaxes. You may opt for the progressive rates instead, but the option then applies to all your investment income and gains of the year.
If you sell below the vesting value, the two plans part ways. Under a qualified plan, the loss is deducted from the acquisition gain, up to its amount, before the 50% allowance applies. Under a non-qualified plan, the tax paid at vesting stays due, and the capital loss can only be set against capital gains of the same year or of the following ten years.
04Qualifying the plan
A foreign plan qualifies when it meets the French free share rules, generally through a French sub-plan. The vesting period must last at least one year, and the vesting and holding periods together at least two years. The plan cannot pay dividends or dividend equivalents during vesting. If you are a corporate officer of the French subsidiary of a listed group, the plan must also meet a condition tied to employee share ownership, profit-sharing or savings schemes covering at least 90% of the French staff.
The sub-plan also changes the cost for the French employer. Instead of full employer social security contributions, it pays a specific employer contribution of 30% of the vesting value, for shares vesting since 1 March 2025. Our case study on qualifying a group RSU plan for France shows how an addendum lifted the obstacles without amending the global plan.
| Non-qualified plan | Qualified plan | |
|---|---|---|
| Year in which the vesting value is taxed | Year of vesting | Year of sale or gift |
| PIT on the vesting value | Progressive rates, as salary | 50% allowance up to €300,000 a year, salary treatment above |
| Social charges on the vesting value | Employee social security contributions | 18.6% up to €300,000 a year, 9.7% plus 10% above |
| Employer cost | Employer social security contributions | 30% employer contribution |
| Withholding through payroll | Yes, when reported by the French employer | No |
05If you moved to or from France during vesting
If you worked in several countries between grant and vesting, France generally taxes the vesting value in proportion to the days you worked in France over that period, subject to the applicable tax treaty. The same apportionment applies if you are no longer a French tax resident when the shares vest or are sold, and French withholding tax may then be due on the French part.
If you benefit from the impatriate tax regime, the vesting value is left out of the remuneration on which the 30% flat-rate impatriation premium is computed. On the sale, however, the regime may help. While it applies, the capital gain on shares held through a broker established outside France, in a country that exchanges tax information with France, is 50% exempt from PIT. Social surtaxes remain due on the full gain.
For the choice between selling, keeping or reinvesting the shares, see our case study on selling or reinvesting shares received as an employee.
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