Managers’ gain (article 163 bis H)
Art. 163 bis H CGI
Gain on securities acquired in return for duties as employee or executive, taxed as salary beyond a performance limit (art. 163 bis H CGI).
Please note.This definition is deliberately simplified. It does not constitute legal or tax advice. The exact conditions, thresholds, rates and periods depend on your situation and on the regulations in force.
Which text applies?
- Art. 163 bis H CGI : Taxes the gain as salary and applies the capital gains regime to the fraction within a limit based on the financial performance multiple, subject to conditions of risk and holding period.
- Art. L. 137-42 CSS : Subjects the fraction of the gain exceeding the limit to a 10% employee contribution.
Which gains fall under article 163 bis H?
The article covers securities subscribed, acquired or granted, including free shares, options and BSPCE (founders’ share warrants), in return for duties as an employee or executive in the issuing company, in a company it holds or in a company that holds it. It applies to disposals, sales, conversions and lettings made on or after 15 February 2025, in the wording resulting from the 2026 Finance Act.
How is the limit of the capital gains regime calculated?
The limit is equal to the value of the securities on their date of acquisition or subscription multiplied by the financial performance multiple, less that same value. The multiple is equal to three times the ratio between the real value of the company at the sale and its real value on entry.
Real value means equity plus debts owed to shareholders and related companies. The limit is reduced by dividends and capital repayments received between entry and sale. Where the securities are issued by a company whose main purpose is to hold the managers’ interests, the value used is that of the target company.
Under which conditions and at which rates?
The fraction within the limit falls under the capital gains regime if the securities carry a risk of losing the price paid and have been held for at least two years; for free shares, options and BSPCE, the risk relates to their value on entry and no holding period is required. It bears the 31.4% flat tax (prélèvement forfaitaire unique).
The excess is taxed at the progressive rates as salary, with the 10% contribution, giving 55% at the top marginal rate before the exceptional contribution on high incomes. If the conditions are not met, the whole gain is salary.
What happens on a gift, an earn-out or a contribution?
On a gift, the gain is determined and taxed in the donor’s name for the year of the gift, for gifts made on or after 20 February 2026. An earn-out is taxed in the year it is received, without recalculating the limit. The fraction taxable as salary may be deferred on certain contributions or exchanges, except a contribution to a company managing the assets of the manager or of the manager’s family.
How does the rule apply? A worked example
Splitting the gain between capital gain and salary
Illustrative example: a manager subscribes €100,000 of shares whose value on entry equals that price. The real value of the company is multiplied by 2.5 between entry and exit; no dividend is paid. The manager sells the shares for €900,000 after three years.
Tax on the excess is calculated at the 45% marginal rate plus the 10% contribution, excluding the exceptional contribution on high incomes and the differential contribution.
- Net gain (€900,000 − €100,000)
- €800,000
- Financial performance multiple (3 × 2.5)
- 7.5
- Limit (€100,000 × 7.5 − €100,000)
- €650,000
- Tax on the capital gain fraction (31.4%)
- €204,100
- Excess taxed as salary
- €150,000
- Tax on the excess (55%)
- €82,500
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