Stage 1: the buyer's registration duties
The rules that apply today
The duties owed by the buyer depend on the nature of what is sold. The sale of a business (fonds de commerce) is taxed at 0% up to €23,000, 3% from €23,001 to €200,000 and 5% above that. A sale of SARL shares bears 3% after an allowance of €23,000 prorated to the number of shares sold. A sale of SAS or SA shares is taxed at 0.1% with no cap.
That last line is essential to understand the real scope of the scheme. Share sales in SAS and SA companies are already at 0.1%. The Pacte Papin will therefore change nothing for an SAS. It concerns businesses sold as a going concern and SARL shares, that is to say a very large part of the fabric of French micro-businesses and SMEs.
| Type of sale | Current rate | On €1.2m |
|---|---|---|
| Business (fonds de commerce) | 0%, 3% then 5% by bracket | €55,310 |
| SARL shares | 3% after a €23,000 allowance | €35,310 |
| SAS or SA shares | 0.1% with no cap | €1,200 |
What the pact provides
Registration duties would fall from 3% to 0.1% under the scheme aimed at employee buyouts. The measure could benefit an employee buying alone as well as several employees who set up a company to buy their business together.
The favourable regime that already exists
Article 732 ter of the French General Tax Code applies a €500,000 allowance on transfer duties when a business is bought by an employee. Three main conditions frame this regime. The buyer must have been a full-time employee on a permanent contract for at least two years, or an apprentice of the company. They must undertake to continue the business effectively and continuously and to run the company effectively for the five years following the buyout. The seller must have held the business, the clientele, the shares acquired for consideration for more than two years. The allowance applies only once between the same seller and the same buyer.
Keep this point in mind, it drives the whole analysis. Below €500,000 and for a direct purchase by an individual, the advantage already exists today. What is new in the Pacte Papin plays out above that threshold and above all in holding-company structures, which case law has excluded from the allowance.
Stage 2: the additional depreciation after the buyout
The mechanism sits on top of standard accounting depreciation. A company buying equipment, whose depreciation is already deductible, would receive an additional deduction of 30% of the value of that equipment, raised to 60% for companies with fewer than ten employees. By temporarily reducing taxable profit, the measure is meant to give buyers more room to modernise the production base after the acquisition.
Read the figure carefully. A 30% deduction is not worth 30% in savings. It is worth 30% multiplied by the corporate income tax rate, that is 7.5% of the value of the equipment at 25%. The 60% rate reserved for very small companies produces around 15%.
The list of eligible equipment has not been published. For micro-businesses, the minister's office mentions a wider scope including IT and professional equipment.
Stage 3: the seller's capital gain
Article 150-0 D ter provides a fixed €500,000 allowance on the capital gain made by an SME owner-manager who sells their shares when retiring, a scheme extended until 31 December 2031. The pact would raise this allowance to €1m when the sale is made to the employees.
Two technical limits matter. The allowance removes €500,000 from the base subject to income tax, not €500,000 of tax. And social security contributions remain due on the whole capital gain before the allowance. Since the 2026 social security financing act, capital gains on securities bear 18.6% in social security contributions against 17.2% before, which brings the overall flat-rate taxation to 31.4%.
The eligibility conditions remain demanding. The seller must have held an effective, paid management position continuously for the five years before the sale. They must have given up all management functions and claimed their pension within the twenty-four months before or after the sale.
Stage 4: spreading the tax when there is a vendor loan
Article 1681 F of the French General Tax Code already makes it possible to pay the tax on the capital gain in instalments. The payments can run until 31 December of the fifth year following the year of the sale, without exceeding the contractual payment period of the price.
The Pacte Papin intends to extend and publicise this mechanism, which the minister's office describes as too little known. The stakes are real. Today, a seller who grants a vendor loan pays tax on a sum they have not yet received, which discourages precisely the tool that internal buyouts need most.
Put figures on your deal in your own configuration
Legal form, price, buyout structure: the result changes completely from one structure to another.
Value my SME →The full worked example
The context. Industrial joinery company set up as an SARL, 28 employees, €4.8m in turnover, €520,000 in EBITDA. The owner-manager is 63, has held 100% of the shares for twenty-two years and is preparing to retire.
The buyers. Four salaried managers, the production director, the workshop manager, the head of finance and administration and a project manager, all on permanent contracts for more than five years.
The structure. Sale price for 100% of the shares set at €1,200,000. The four buyers set up a holding company that acquires the shares. Financing through €300,000 of personal contributions, a €420,000 vendor loan over five years and €480,000 of senior bank debt over seven years.
The registration duties
The acquisition goes through a company owned by several people, which rules out the Article 732 ter allowance. The duties are therefore charged at the full rate.
| Situation | Calculation | Duties |
|---|---|---|
| Current rules | (1,200,000 − 23,000) × 3% | €35,310 |
| With the Pacte Papin | 1,200,000 × 0.1% | €1,200 |
| Immediate saving | at closing, on the buyers' equity | €34,110 |
Set against the €300,000 of equity put in, this saving represents more than eleven per cent of the four employees' personal effort. It arrives at the exact moment when the financing plan is tightest.
The additional depreciation
The company commits €400,000 of productive investment in the first year, a CNC machining centre and two finishing lines. With 28 employees, the 30% rate applies.
| Item | Calculation | Amount |
|---|---|---|
| Productive investment | eligible equipment | €400,000 |
| Additional deduction | 400,000 × 30% | €120,000 |
| Corporate income tax saved | 120,000 × 25% | €30,000 |
These €30,000 stay in the company and go straight to repaying the acquisition debt.
The seller's capital gain
Cost price of the shares €200,000, sale price €1,200,000, capital gain €1,000,000. The owner-manager is retiring and meets the conditions of Article 150-0 D ter.
| Component | Current regime | With the pact |
|---|---|---|
| Allowance applied | €500,000 | €1,000,000 |
| Income tax at 12.8% | €64,000 | €0 |
| Social security contributions at 18.6% | €186,000 | €186,000 |
| Total owed by the seller | €250,000 | €186,000 |
The saving reaches €64,000. Social security contributions are still calculated on the whole capital gain; the allowance only reduces the income tax base. As a benchmark, with no allowance at all, the same capital gain would bear €314,000.
Spreading the tax
The €420,000 vendor loan is repaid over five years. The seller pays their €186,000 in instalments as the money comes in instead of settling everything the year after the sale, which spares them from advancing around €65,000 of cash in the first years.
The overall result of the deal
| Beneficiary | Lever | Gain |
|---|---|---|
| Buyers | registration duties | €34,110 |
| Company | additional depreciation, first year | €30,000 |
| Seller | doubled retirement allowance | €64,000 |
| Total | i.e. 10.7% of the sale price | €128,110 |
The most structuring effect is not the overall amount but how it is spread. The €34,110 of duties avoided arrive exactly at closing. The €30,000 of additional depreciation come in year one, when the debt weighs most. The seller's €64,000 strengthen their ability to grant a vendor loan, and so to finance part of the buyout themselves.
What the example does not say
The four buyers still have to raise €300,000. None of the four levers creates equity. The Pacte Papin reduces the friction cost of a deal that can already be financed; it does not turn a deal that cannot be financed into one that can.
On our files, it is this equity hurdle that makes internal buyouts fail, not the registration duties. An SME manager earning €55,000 a year does not build up €75,000 of personal savings to contribute, short of mortgaging their home. As long as this point is not addressed, the number of employee buyouts will barely move.
Key takeaways
- The cut from 3% to 0.1% concerns neither SAS nor SA companies, already taxed at 0.1%.
- A €500,000 allowance already exists for employee buyers, but not for buyouts through a joint holding company.
- A 30% additional depreciation is worth around 7.5% in real tax savings, not 30%.
- On a €1.2m buyout, the full scheme would be worth around €128,000, i.e. 10.7% of the price.
- No lever creates equity, which remains the real sticking point.
Sources and references
The amounts for the Pacte Papin rest on the government announcements of September 2026. No text has been voted. The rates, thresholds and eligibility conditions may change during the parliamentary debate. The calculations are given for illustration and do not replace a personalised study.
- Announcements by the office of the Minister for SMEs, Trade, Crafts, Tourism and Purchasing Power, September 2026, and interview with Serge Papin in Les Échos.
- French General Tax Code, Articles 719, 726 and 732 ter for registration duties and the allowance for employee buyers.
- French General Tax Code, Article 150-0 D ter for the €500,000 allowance on retirement, extended until 31 December 2031.
- French General Tax Code, Article 1681 F for paying the tax in instalments when there is a vendor loan.
- 2026 social security financing act, raising social security contributions on capital gains on securities from 17.2% to 18.6%.
This article is for general information purposes. It constitutes neither legal advice, nor tax advice, nor an investment recommendation. Sources last checked: September 2026.
