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French management incentive packages: opportunity or risk?

Three important rulings (arrêts) from the French Supreme Administrative Court (Conseil d’Etat) on 13 July 2021 are reshuffling the deck regarding the tax treatment of gains arising from French management incentive packages.

The French Supreme Administrative Court ruled that, aside from legally regulated schemes (i.e. qualifying free shares and stock option plans), the gains arising from equity linked instruments acquired by employees and managers are taxable as employment income and salary (rather than as capital gains) if the gain is essentially consideration for and intrinsically linked to the exercise of employment of the employee or manager and their office held.

Estelle Philippi, Tax Partner, develops the outcome of these rulings in the video below. 

 

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