2017 Draft Finance Bill: amendment of the “Macron” regime applicable to free shares
12th October 2016
An amendment would limit the tax and social benefits provided by the “Macron” regime
The Finance Commission of the French “Assemblée Nationale” has adopted this Wednesday October 12th an amendment affecting the tax and social security treatment of the gains related to the grant of free shares which have been put into place by Article 135 of the Macron Law (Law n° 2015-990 for the economic growth dated August 6th, 2015).
As a reminder, the “Macron” regime allows notably the taxation of the acquisition gain as a capital gain (i.e., (i) taxation of the acquisition gain at progressive rates with the possibility to benefit from a rebate based on the length of holding of the shares, and (ii) subject the gain to social surtaxes applicable to investment income). On the employer’s side, the employer contribution, which is now due on the actual value of the shares delivered, is reduced from 30% to 20%.
The purpose of this amendment is to restore the taxation of the acquisition gain as employment income, disallowing the benefit from the rebate based on the length of holding of the shares and to increase the employer contribution rate from 20% to 30%. Please note that the provisions related to the exemption of the employer contribution for small and medium size companies have not been modified.
In addition, the 10% employee contribution remains cancelled.
This amendment must still be discussed before the French “Assemblée Nationale” as from October 18th, 2016 and subject to vote on October 25th, 2016. Please note that this amendment is in contradiction with the French government’s position, which was – up to now - against a modification of the Macron regime.
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