On May 7, 2026, the Council of State issued a long-awaited decision in the case of Prezioso Montecin / Tournesol / Sunflower (n° 493083). This ruling clarifies a crucial question for executives, founders, and investors: can the gain realized from the contribution of shares to a holding company be requalified as salary and wages, even if this contribution benefits from the tax deferral provided for in Article 150-0 B of the General Tax Code?

This decision, seemingly technical, has very concrete implications for many contribution-sale operations and for the wealth structuring of start-ups and scale-ups.

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A Changing Context: The Taxation of Management Packages in 2026

For several years, management packages—mechanisms that associate executives with capital—have played a central role in the compensation of founding teams. They align the interests of managers with those of investors.

However, their tax treatment has often been a source of uncertainty, oscillating between capital gains and compensation depending on the link between the gain and the functions performed.

Following the jurisprudential framework of 2021, several rulings (notably Wendel in 2020 and BNP Paribas in 2024) had defined the contours of requalification. The Prezioso Montecin ruling of May 2026 extends this movement by addressing a specific scenario: that of the contribution of shares to a personal holding company under tax deferral.

This decision comes in a legislative context undergoing reorganization: the 2025 finance law introduced Article 163 bis H of the CGI, applicable to operations concluded after February 15, 2025, to specifically regulate the taxation of management packages. For previous operations, it is pure jurisprudence that continues to apply.

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The Question Posed to the Administrative Judge

In the Prezioso Montecin case, an executive contributed shares of the company Tournesol to his personal holding Sunflower, while benefiting from the tax deferral provided by Article 150-0 B.

The tax administration considered that the gain realized on this occasion—although not immediately taxable—should be requalified as salary and wages, arguing that it constituted compensation for his executive functions.

The question was therefore: can a gain be requalified as salary income even when its taxation is deferred by the tax deferral?

The Council of State answered affirmatively.

The contribution, it explains, generates an autonomous gain: the difference between the value of the shares received and the acquisition price of the contributed shares. The deferral only postpones the taxation, without neutralizing the tax qualification of the gain.

In other words, it is now clear that a benefit related to the executive function can be recognized at the stage of the contribution, regardless of the subsequent sale.

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What Changes with the Decision of May 7, 2026

1. An Extension of the 2021 Framework

Until now, the analysis of the link between the gain and the managerial function mainly occurred at the time of the final sale of the shares.

The Council of State takes a further step: it invites to examine this link as soon as the shares are contributed, that is, at the moment the gain arises economically, even if its taxation is deferred.

This means that the qualification of the capital gain (capital or compensation) must now be considered as early as possible in the chronology of the operation.

2. A Tension with the Principle of Neutrality of the Deferral

Traditionally, the tax deferral (Article 150-0 B) relies on a fiction of neutrality: no capital gain is recognized for tax purposes at the time of the contribution.

However, the Council of State distinguishes here between two levels:

the calculation of the tax, which remains deferred;

the qualification of the gain, which can be determined immediately.

Thus, the neutrality of the deferral is preserved from an accounting perspective, but not regarding the nature of the income. A nuance that confirms the sophistication of the administrative judge's analysis.

3. A Confirmation of the “BNP Paribas” Doctrine of 2024

The Council of State reiterates the logic already established in 2024: the categorical requalification (moving from a capital gain to a salary) does not require an abuse of rights procedure (Article L. 64 of the LPF), as long as no legal act is excluded.

In other words, the administration can requalify the nature of the income without having to demonstrate an artificial arrangement.

4. Considerable Practical Implications

In practice, this jurisprudence expands the cases where the tax administration can requalify a management package gain.

For contribution operations prior to 2025 and still within the recovery period, the risk of requalification without resorting to the abuse of rights procedure becomes real.

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Issues and Precautions for Executives and Founders

1. Document the Risk and Real Value at the Date of Contribution

The key now lies in the proof of the economic risk actually borne by the manager.

To avoid requalification, it is essential to demonstrate that the executive invested under the same conditions as other shareholders:

absence of price guarantees,
independent valuation of the shares,
identical conditions to financial investors.

This documentation will be crucial in the event of an audit.

2. Anticipate the Effects of the New Legal Framework (Article 163 bis H CGI)

For operations concluded after February 15, 2025, the tax law directly regulates management packages. It clearly distinguishes between salary-like gains and wealth-like gains, with a possibility of integration into a PEA under certain conditions.

But for previous operations—especially those carried out between 2012 and 2025—the Prezioso Montecin jurisprudence fully applies.

3. Adapt the Legal Structuring of High-Equity Operations

For start-ups in the process of raising funds or selling, this decision calls for increased vigilance during contribution-sale operations via holding companies.

Founders must integrate the tax dimension of the management package treatment from the design of the structure, not afterward.

Prior consultation with a tax lawyer helps secure the tax treatment and prevent an incentive mechanism from being subsequently requalified as compensation.

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Towards a More Stable Taxation of Management Packages?

Underlying this, the Council of State pursues a logic of coherence: to qualify the gain at the source, according to its real economic origin.

This approach, combined with the entry into force of Article 163 bis H, aims for a more predictable taxation of management packages, clearly distinguishing the personal investment of the manager from the compensation for their functions.

However, the boundary remains delicate to draw. A case-by-case analysis is necessary, taking into account the objective conditions of the investment, the degree of risk, and existing protection clauses.

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In Conclusion: A Strong Signal for Entrepreneurs and Investors

The Prezioso Montecin decision of May 7, 2026, marks an important milestone.

It extends the scope of tax requalification to the moment of contribution, even under tax deferral, and reinforces the requirement for economic justification of management package schemes.

For executives, start-ups, and investors, this serves as a clear reminder: the tax security of an operation cannot be conceived afterward, but must be considered from its structuring.

A tailored legal and tax support is therefore essential to ensure compliance of incentive schemes and preserve the effectiveness of the entire structure.

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PRAX Avocats, a recognized firm in business law and taxation of innovative companies, supports executives and investors in the secure structuring of their high-equity operations.

Specialists in French and international taxation, we also intervene in labor law, intellectual property, and complex contracts, in connection with our partner firms “Best Friends”.

Contact our team to consider a secure and fully compliant optimization of your management package.

Tax requalification of management packages: analysis of the Prezioso Montecin decision (Council of State, May 7, 2026)