Management Packages: consolidation and clarification of the social security regime
Two decrees published on 30 December 2025 amend several key rules governing public procurement contracts: the increase and permanent application of certain thresholds, improved access for micro-enterprises and SMEs, and procedural adjustments in the event of performance-related contingencies. This overview sets out what has actually changed, what has been set aside, and what needs to be anticipated in practice.
What is the social security treatment of a gain that qualifies under the new regime of Article 163 bis H of the French Tax Code (CGI) concerning management packages?
The applicable social security charges consist of:
– social contributions at a rate of 18.6% on the portion eligible for the capital gains regime;
– a flat employee contribution of 10% on the excess gain.
Article 163 bis H of the French Tax Code, introduced by the Finance Act for 2025, established a specific tax regime for gains arising from management packages.
The corresponding social security treatment of this regime was made permanent and clarified by the Social Security Financing Act for 2026.
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How can the portion of a gain taxed as a capital gain be distinguished from the portion taxed as employment income in a management package?
The regime under Article 163 bis H of the French Tax Code establishes a binary distinction based on a threshold:
• The portion of the gain that is less than three times the company’s financial performance is taxed as a capital gain;
• Any excess gain is taxed as employment income.
This regime applies to qualifying instruments within the meaning of Article 163 bis H of the French Tax Code (CGI), meaning securities that expose their holder to a risk of capital loss, whether they are legally defined instruments (i.e., free share awards, stock options, BSPCE) or not.
Instruments that are not legally recognised must additionally have been held for at least two years.
Stabilisation of the social security regime
The Finance Act for 2025 introduced a special 10% social contribution on the portion of gains taxed as employment income.
However, this contribution was initially established only for a three‑year period, i.e., until 31 December 2027.
Indeed, in accordance with the constitutional rules governing the respective scopes of Finance Acts and Social Security Financing Acts, provisions falling within the exclusive competence of Social Security Financing Acts cannot be permanently enacted through a Finance Act.
Article 17 of the Social Security Financing Act for 2026 therefore makes permanent the application of the special 10% social contribution.
Clarification of the social security regime
In order to ensure full consistency between the tax regime and the social security regime applicable to management packages, Article 17 of the Social Security Financing Act for 2026 amends the scope of exemptions from the General Social Contribution (“CSG”) and social security contributions, as well as the scope of the special 10% social contribution.
These changes apply to disposals, transfers, conversions and leases carried out as from 15 February 2025.
Regarding exemptions from CSG and social security contributions
The Finance Act for 2025 had established an exemption regime from CSG on earned income and from social security contributions on gains derived from securities subscribed or acquired in consideration of employee or executive functions, without expressly referring to Article 163 bis H of the French Tax Code (CGI).
From now on, only the portions of gains derived from qualifying securities under the tax regime of Article 163 bis H of the CGI benefit from these exemptions.
These include:
• the portion of the gain taxed as a capital gain;
• where applicable, the portion exceeding three times the company’s financial performance.
Conversely, gains arising from non‑qualifying securities will be subject to CSG on earned income as well as to social security contributions.
In such cases, the standard regime applicable to employment income therefore applies, with ordinary social security contributions.
Note: the portion of the gain taxed as a capital gain remains subject to CSG on investment income, the rate of which was increased from 9.2% to 10.6% by Article 12 of the Social Security Financing Act for 2026, applicable from the taxation of income for the year 2025.
Regarding the specific social contribution
The 2025 Finance Act had introduced the special 10% social contribution on gains taxed as employment income, without distinguishing whether the securities concerned were qualifying or non‑qualifying within the meaning of Article 163 bis H of the French Tax Code (CGI).
Under Article 17 of the 2026 Social Security Financing Act, the special 10% social contribution now applies only to gains derived from qualifying securities, and only to the portion taxed as employment income.
In conclusion
The social security treatment of gains derived from qualifying securities within the meaning of Article 163 bis H of the French Tax Code is as follows:
• the portion taxed as a capital gain is subject to social levies at an overall rate of 18.6%;
• the portion taxed as employment income is subject to the special 10% social contribution.
Conversely, gains derived from non‑qualifying securities are subject to the ordinary social security contributions applicable to employment income, at an overall rate of 67% (i.e., approximately 42% employer contributions and 25% employee contributions).