French qualified employee share awards are subject to reporting requirements in France each year for French organizations, and foreign organizations with French qualified equity plan participants. Stock options granted or exercised, and free shares granted or vested during the tax year are required to be reported no later than the following 31 January In addition, each beneficiary of such awards must be provided with an Individual Statement detailing the transactions relevant to them by 1 March.

Whilst there have not been any significant changes to the process for , the key reporting requirements that employers and individuals should be made aware of for any qualified transactions for the tax year are as follows:.

Stock options granted and free shares awarded during must be reported on the annual wage reporting form - Form N4DS. The filing deadline for this form is 31 January The granting company - or the French employer, if different, must report the details of the stock options exercised during on form N4DS. Again, this form must also be filed no later than 31 January For stock options granted since 28 September , there is a requirement for the employer to report to the social tax authorities the number of shares delivered and their respective value in order to benefit from the exemption of standard social security contributions on any gain made at exercise.

If this reporting is not done, social security will be levied on the value of the gain. For each beneficiary, an individual exercise statement detailing the stock options exercised during must be prepared by the employer and sent to the beneficiary by no later than 1 March For stock options granted before 28 September , an individual statement must also be filed if the shares are sold before the fourth anniversary from the date of grant or if a share exchange occurs as a result of an interim transaction performed in compliance with French law.

The granting company, or the French employer, if different, must report the details of any free shares vested - shares delivered during by filing form N4DS by no later than 31 January Again, the requirement for the employer to report the number of shares acquired and their respective value to the social tax authorities is a condition required to be met in order for the acquisition gain to be exempt from standard social security contributions.

French annual reporting requirements for stock options and free share awards - EY - Global

If this is not done, social security will be due on the value of the acquisition gain. For each beneficiary, an individual delivery statement detailing the shares delivered during must also be prepared by the employer and sent to the beneficiary no later than 1 March An individual statement must also be filed if the shares are sold before the end of the mandatory two year holding period or if a share exchange occurs as a result of an interim transaction performed in compliance with French law.

For employees who are not resident at the relevant date only the French sourced portion of the gain must be reported on Form N4DS, and on the individual statement.

This requirement, which applies to both stock options and free share award acquisition gains, is used by the French tax authorities in order to reconcile the gain reported by the individual beneficiaries.

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It is also used to determine the taxable basis of the income tax withholding, if any, which will have to be applied by the brokers upon the sale of the shares by beneficiaries who are not deemed as French tax residents. Employers with employees who have been granted stock options or free shares, or who have had stock options or free shares that have exercised or vested, during should be aware of their respective reporting requirements.

They should complete and file the Form N4DS by 31 January with the French tax and social authorities and the individual statement provided to the individual beneficiary by 1 March Download this alert as a PDF. Help us to improve this page.

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