France proposes tax relief for time-savings transfers into employee share plans

A provisional first-reading measure

Amendment I-1599 was adopted during the National Assembly’s first reading of Finance Bill 3210. The Assembly’s provisional integrated text places the measure in new Article 4 ter and resolves drafting inconsistencies in the standalone amendment. The bill has not completed the parliamentary process, and the integrated document itself says that only the later ‘petite loi’ will be authentic. Employers should therefore treat the measure as a proposal, not enacted relief.^[1][2]

Current relief is tied to retirement saving

Under current Article 81(18°)(b bis) of the General Tax Code, qualifying sums derived from rights held in a compte épargne-temps, or from untaken rest days where no such account exists, can be exempt from income tax when paid into specified retirement savings arrangements. Employer top-ups in time or money are excluded and the exemption is limited to ten days a year. Labour Code Article L3152-4 and Social Security Code Article L242-4-3 provide the related use and contribution framework.^[3][4][5]

Separate employee-share route

Provisional Article 4 ter would raise the existing retirement-route ceiling in Article 81(18°)(b bis) from ten to fifteen days a year. It would also add a separate ten-day annual exemption for qualifying time-savings rights or untaken rest days transferred to an employee savings plan and used to acquire securities issued by the employer or a linked company, or units in the employee-investment funds specified in the text. The integrated wording places this proposed rule in Article 81(18°)(c).^[1][3]

The accompanying Labour Code changes would add that employee-savings use to Article L3152-4. They would set a twenty-day annual ceiling for the two retirement-related routes together and a separate ten-day ceiling for the new employee-share route. The proposal would also extend the Social Security Code Article L242-4-3 contribution treatment to the new route, with that extension expiring on the last day of the thirty-sixth month after promulgation.^[1][4][5]

Systems changes should await enactment

Multinational groups operating French employee share plans would need payroll, human-resources and plan systems to distinguish employer-funded from employee-funded rights, monitor the separate annual day limits and restrict investments to the securities and funds ultimately retained in the enacted text. The final wording and commencement remain subject to the remaining parliamentary stages, so implementation should await enactment and confirmation of any transitional rules.^{[1][2][3][4][5]}