The Administrative Court of Appeal of Toulouse issued a highly anticipated decision on June 25, 2026, regarding the operation of the Equity Savings Plan (PEA). This ruling (n° 24TL00845) specifies that a capital increase through incorporation of issuance premium leads to the closure of the PEA when the new shares resulting from this operation are held within the plan.

An important reminder for individual investors, but also for entrepreneurs and start-up leaders who use their PEA to invest in their own company.

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Understanding the context: how does the PEA work?

The PEA is a particularly advantageous tax tool, allowing individuals to build a portfolio of shares while benefiting from an exemption from tax on capital gains and dividends, provided certain duration and fund usage conditions are met.

In practice, only the amounts paid into the plan can be used to acquire eligible securities: shares, convertible bonds, or shares in unlisted companies meeting legal criteria. Any other scheme for enriching the plan must be examined in light of Article L. 221-31 of the Monetary and Financial Code, which strictly regulates the "uses" and "reuses" of funds.

It is precisely on this point that the CAA of Toulouse was called to rule.

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The facts: when a capital increase jeopardizes the tax advantage

In this case, a taxpayer had carried out two successive operations:

1. First step – compliant capital increase

He subscribed to new shares during a capital increase funded by withdrawals from his PEA. This first operation, carried out with liquidity from the plan, was perfectly compliant with legal rules.

2. Second step – incorporation of the issuance premium

Subsequently, the company decided to increase its capital by incorporating the issuance premium created during the first operation. The shares resulting from this incorporation were then granted free of charge to the holder and recorded in the same PEA.

It is this second step that poses a problem.

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The decision: "disconnected" shares from the original plan

The Administrative Court of Appeal ruled that the shares allocated following the incorporation of the issuance premium cannot be considered as a use or reuse of the amounts invested in the PEA.

Once the issuance premium is paid to the company, it indeed loses all connection with the plan:

The new shares do not constitute a direct or indirect use of the PEA funds, but rather a benefit derived from the company's equity.

Consequently, the registration of these securities in the PEA is irregular, leading to its automatic closure and the immediate taxation of the capital gain realized on that date (in accordance with Article 157, 5° bis of the General Tax Code).

Note: the court also noted a second violation, as some shares were allocated from old shares not registered in the plan – thus aggravating the sanction.

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Practical implications for investors and leaders

This decision confirms a position already hinted at by the administration, even though the ministerial response of October 16, 1995 initially concerned the incorporation of reserves, not issuance premiums. By applying this reasoning by analogy, the CAA secures the doctrine: the financial link between the PEA and the company must remain strictly direct.

For entrepreneurs and investors:

Any capital increase operation must be anticipated and structured. It is essential to distinguish operations financed by the PEA from those derived from the company's equity.

Incorporations of premiums, reserves, or profits must be examined to avoid any risk of requalification.

In case of doubt, it is preferable to hold the new shares outside the PEA to preserve the validity of the plan.

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A specific issue for start-ups and innovative companies

Many start-ups use the PEA as a lever to involve their founders or historical investors in capital growth. These operations, often linked to successive increases or the creation of issuance premiums, must now be approached with increased vigilance.

The ruling of June 25, 2026, invites a reconsideration of the legal structure of these financings:

Consider direct subscriptions funded by the plan (subject to the eligibility of the securities).

Clearly separate internal accounting operations (incorporations) from those intended for new contributions.
Assess, before any operation, the tax consequences on the PEA and the personal situation of the leader or investor.

In this type of arrangement, the assistance of a business law attorney and in corporate taxation is essential.

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Key takeaways

Shares resulting from an incorporation of issuance premium cannot be held in a PEA, as they do not constitute a "use" or "reuse" of amounts paid into the plan.

This irregularity leads to the closure of the PEA and the taxation of capital gains, even in good faith.
Leaders must secure their capitalization operations through dedicated legal advice, especially when structuring funding rounds or employee share ownership plans.

PEA and issuance premium: a recent decision reminds us of the limits not to be crossed.