The Dutreil pact (pacte Dutreil) was rewritten by the Law of 19 February 2026, and not by a finance law (loi de finances) applicable from 1 January. The exemption remains 75%, but the individual undertaking to retain the shares is increased to six years, which run from the end of the collective undertaking and not from the transfer. Three certificates are now spread over the entire period, and the condition as to the use of the assets no longer looks only at the past three years.
Which legislation has governed the Dutreil pact since 21 February 2026?
Which legislation amended the Dutreil pact in 2026?
Law no. 2026-103 of 19 February 2026, in its article 8. This is not a finance act (loi de finances). Article 787 B of the French Tax Code, the provision in which the Dutreil pact is set out, was amended by that law, and its wording has been in force since 21 February 2026.
| Point | What article 787 B of the French Tax Code has provided since 21 February 2026 |
|---|---|
| Rate of exemption | 75% of the value of the shares or units |
| Collective undertaking to retain the shares | Minimum term of two years, in progress on the day of the transfer |
| Thresholds for the collective undertaking | At least 10% of the financial rights and 20% of the voting rights where the shares or units are admitted to trading on a regulated market; failing that, at least 17% of the financial rights and 34% of the voting rights, including the shares or units transferred |
| Individual undertaking to retain the shares | Six years from the date of expiry of the term of the collective undertaking |
| Condition as to the activity | Met from the conclusion of the collective undertaking until the end of the individual undertaking |
| Office held within the company | By one of the shareholders who signed the collective undertaking or by one of the heirs, donees or legatees, for the duration of that undertaking and for the three years following the transfer |
| Assets excluded from the exemption | The portion of the market value of the securities representing the assets listed in the article, where they are not used exclusively for the purposes of the activity |
| Duration of the exclusive use | At least three years before the transfer or, failing that, since the acquisition of the asset, and until the end of the individual undertaking or, failing that, until the disposal of the asset |
| SME innovation account (compte PME innovation) | The shares or units must not be recorded in such an account |
| Certificates | Three: one attached to the inheritance declaration (déclaration de succession) or to the deed of gift; one on request from the French tax authorities, within three months of the request; one within three months of the end of the individual undertaking |
From what date does the new wording apply?
Since 21 February 2026. The applicable wording of article 787 B of the French Tax Code has been in force since 21 February 2026, and the article contains no transitional provision. The date of 1 January 2026, often quoted, corresponds to nothing in this legislation: the reform results from article 8 of Law no. 2026-103 of 19 February 2026.
What exactly does the 75% exemption cover?
What does the 75% exemption under the Dutreil pact cover?
It covers 75% of the value of the shares, not the whole of it. Article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, exempts the shares or units of a company from transfer duties on gifts and inheritances "up to 75% of their value". The advantage operates on the basis of assessment: the fraction which exceeds that 75% remains subject to transfer duties on gifts and inheritances. The Dutreil pact does not abolish the tax on the transfer, it reduces the taxable value of the shares by three quarters.
Which companies are eligible for the Dutreil pact?
Those whose principal activity is industrial, commercial, craft, agricultural or professional. Article 787 B of the French Tax Code, in its wording in force since 21 February 2026, confines the 75% exemption to the shares or units of a company "whose principal activity is industrial, commercial, within the meaning of articles 34 and 35, craft, agricultural or professional". The provision requires a principal activity, and not a sole activity. Commercial character is assessed within the meaning of articles 34 and 35 of the French Tax Code, to which article 787 B refers. That condition as to activity is not sufficient on its own: it comes in addition to the undertakings to retain the shares which the same article requires.
Does the Dutreil pact apply to an inheritance as it does to a gift?
To both, and also to a transfer in full ownership to a perpetuity fund (fonds de pérennité). Article 787 B of the French Tax Code, in force since 21 February 2026, covers shares or units "transferred on death, inter vivos or, in full ownership, to a perpetuity fund referred to in article 177 of Law no. 2019-486 of 22 May 2019". An inheritance and a gift therefore each open up the 75% exemption, the requirement of full ownership being imposed only for the transfer to the perpetuity fund. A gift with reservation of a usufruct remains possible, subject to one condition which article 787 B itself states: that "the voting rights of the usufructuary be limited by the articles of association to decisions concerning the allocation of profits".
Can a company which manages its own assets benefit from the Dutreil pact?
No: the management by a company of its own movable or immovable assets does not give rise to the 75% exemption. Article 787 B of the French Tax Code, in force since 21 February 2026, rules this case out: "the carrying on by a company of an activity of managing its own movable or immovable assets is not regarded as an industrial, commercial, craft, agricultural or professional activity". A company whose principal activity consists in managing its real estate or its portfolio of securities is therefore excluded. The same article nevertheless reserves one case: "a company which, in addition to managing a portfolio of shareholdings, has as its principal activity active participation in the conduct of the policy of its group made up of companies controlled directly or indirectly, is nevertheless regarded as carrying on a commercial activity […]". This is what practitioners call the active holding company (holding animatrice): active holding company and the Dutreil pact.
Does the 75% exemption cover all of the company's assets?
No: the exemption does not apply to the fraction of the value of the shares representing certain assets. Article 787 B of the French Tax Code, in force since 21 February 2026, provides that "the exemption does not apply to the fraction of the market value of the shares or units […] representing the value of the following assets which are not exclusively used by the company […] for the activity". These include assets used for hunting and fishing, passenger vehicles, yachts, pleasure boats, aircraft, jewellery, precious metals, works of art, collectors' items or antiques, racehorses or competition horses, wines and spirits, and dwellings and residences (detailed list and condition as to use). The exclusion extends to the same assets held by a company controlled directly or indirectly within the meaning of 2° of III of article 150-0 B ter of the French Tax Code. The exclusive use must exist for a period of at least three years before the transfer or, failing that, since the acquisition of the asset, and until the end of the individual undertaking to retain the shares provided for in c of the same article or, failing that, until the asset is disposed of.
Which assets are excluded from the Dutreil exemption, and on what condition?
Which assets are excluded from the 75% exemption?
No asset is excluded by nature: seven headings are excluded only where they are not exclusively used for the activity. Article 787 B of the French Tax Code, as drafted by Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, provides that "the exemption does not apply to the fraction of the market value of the shares or units […] representative of the value of the following assets": assets used for hunting, assets used for fishing, passenger vehicles (véhicules de tourisme), yachts, sailing or motor pleasure boats and aircraft, jewellery, precious metals and works of art, collectors' items or antiques, racehorses or competition horses, wines and spirits, and dwellings and residences. The regime is not lost as a result: only the fraction of value representative of those assets falls outside the exempt basis of assessment, and not the securities transferred.
| Heading concerned | Set aside from the exemption if it is not exclusively used for the activity |
|---|---|
| Hunting | Assets used for hunting |
| Fishing | Assets used for fishing |
| Vehicles, boats, aircraft | Passenger vehicles, within the meaning of article L. 421-2 of the French Code of Taxes on Goods and Services (code des impositions sur les biens et services), yachts, sailing or motor pleasure boats and aircraft |
| Jewellery and works of art | Jewellery, precious metals and works of art, collectors' items or antiques, excluding those benefiting from the regime provided for in article 238 bis AB of the French Tax Code |
| Horses | Racehorses or competition horses |
| Wines and spirits | Wines and spirits |
| Dwellings | Dwellings and residences |
Must the asset have been used for the activity for three years?
At least three years before the transfer, or since the asset was acquired where that is more recent, and the use must continue after the transfer. Article 787 B of the French Tax Code sets aside from the exempt basis of assessment only the fraction of value representative of the assets listed "which are not exclusively used by the company, for a period of at least three years before the transfer or, failing that, since their acquisition, and until the end of the undertaking provided for in c or, failing that, until its disposal, for the activity". The three-year condition is therefore only the first limb of a requirement which also runs into the future. A dwelling acquired six months before the gift is assessed over those six months, since the text takes the date of acquisition where the three years are not met.
Must the use be maintained after the transfer?
Yes, until the end of the six-year individual undertaking or, failing that, until the asset is disposed of. Article 787 B of the French Tax Code, as in force since 21 February 2026, requires exclusive use not only during the three years preceding the transfer, but also "until the end of the undertaking provided for in c or, failing that, until its disposal". The undertaking in c is the one by which each of the heirs, donees or legatees undertakes, in the inheritance declaration or in the deed of gift, to retain the shares or units transferred "for a period of six years from the date of expiry of the period referred to in a", that is to say the period of the collective undertaking to retain the shares. The use of the assets is therefore not a matter closed by the signing of the deed of gift.
Does a yacht held by a subsidiary escape the exclusion?
No, the exclusion extends to the same assets held by a controlled company. Under article 787 B of the French Tax Code, the exclusion extends to the same assets held by a company controlled directly or indirectly within the meaning of 2° of III of article 150-0 B ter of the French Tax Code. Placing a pleasure boat, wines or a residence in a company controlled in that way therefore does not put those assets outside the scope of the exclusion. The test adopted by the text is that of control, direct or indirect, within the meaning of that same 2° of III of article 150-0 B ter of the French Tax Code.
Is an asset in mixed use excluded?
The text requires exclusive use, and that is all that can be said about it. Article 787 B of the French Tax Code adopts the test of assets "exclusively used" for the industrial, commercial, craft, agricultural or professional activity of the company. It makes no provision for apportionment according to the intensity of the business use and it does not settle the position of an asset in shared use. The inventory of the assets falling within the seven excluded headings, and the evidence of their use over the whole of the required period, are prepared before the collective undertaking to retain the shares is signed.
Which collective undertaking is required, and on what thresholds?
How long must the collective undertaking have been running before the transfer?
Two years at the very least, and the collective undertaking must be in force on the day of the transfer. Point a of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, makes the 75% exemption from transfer duties on gifts and inheritances subject to a collective undertaking to retain the shares for a minimum period of two years which is in force on the day of the transfer. That undertaking is given by the deceased or the donor together with other shareholders.
What shareholding thresholds must be reached for a Dutreil pact?
At least 10% of the financial rights and 20% of the voting rights for shares or units admitted to trading on a regulated market, at least 17% and 34% otherwise. Point b of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, requires a collective undertaking covering at least 10% of the financial rights and 20% of the voting rights where the shares or units are admitted to trading on a regulated market, and at least 17% of the financial rights and 34% of the voting rights otherwise, including the shares or units transferred. Those thresholds must be complied with throughout the collective undertaking.
| Shares or units of the company | Financial rights | Voting rights |
|---|---|---|
| Admitted to trading on a regulated market | at least 10% | at least 20% |
| Not admitted to trading on a regulated market | at least 17% | at least 34% |
Can a Dutreil pact be entered into alone, without any other shareholder?
Yes, point a of article 787 B of the French Tax Code provides that the collective undertaking to retain the shares may be given by a single person. As worded following Law no. 2026-103 of 19 February 2026, that provision therefore imposes no co-signatory on a family shareholder who reaches the thresholds in point b on their own, namely at least 17% of the financial rights and 34% of the voting rights, or at least 10% of the financial rights and 20% of the voting rights where the shares or units are admitted to trading on a regulated market.
Can a collective undertaking be signed after the death?
Yes, within the six months following the transfer. Point a of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, provides that where the shares or units transferred on death were not subject to any collective undertaking to retain them, the heirs may enter into one within the six months following the transfer.
Can the collective undertaking be deemed to have been given without a signed pact?
Yes, where the shares or units have been held for at least two years up to the level of the thresholds and their holder has for at least two years carried on their main professional activity or held one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code. Point b of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, deems the collective undertaking to have been given where the shares or units have been held for at least two years, up to 17% of the financial rights and 34% of the voting rights, or 10% and 20% for securities admitted to trading on a regulated market, by an individual alone or together with their spouse, their partner under a civil solidarity pact (pacte civil de solidarité, PACS) or their publicly acknowledged cohabiting partner (concubin notoire). The offices accepted are those listed in 1° of 1 of III of article 975 of the French Tax Code.
Can shares be sold to another signatory, or a new shareholder brought into the pact?
Sales and gifts of securities between signatories are permitted, and the admission of a new shareholder requires the collective undertaking to be renewed for a minimum period of two years. Point b of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, permits sales or gifts of securities between signatories to the collective undertaking to retain the shares, and allows a new shareholder to be admitted to that undertaking provided that it is renewed for a minimum period of two years.
Must the Dutreil pact be registered?
The collective undertaking to retain the shares can be relied on as against the French tax authorities only from the date of registration of the instrument recording it. Point b of article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, sets the registration of the instrument recording the collective undertaking as the starting point for its enforceability against the French tax authorities.
How long must the shares be retained after the transfer?
Do the six years of retention run from the date of the gift?
No. The six years do not run from the transfer, but from the expiry of the collective undertaking to retain the shares. Point c of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, requires the shares or units transferred to be retained "for a period of six years from the date of expiry of the period referred to in point a". The period referred to in point a is that of the collective undertaking to retain the shares, with a minimum duration of two years, which is running on the date of the transfer. The starting point of the six years therefore depends on the date of expiry of that collective undertaking, and not on the date of the deed of gift. Where the shares transferred on death were not subject to such an undertaking, point a allows the heirs to enter into one within the six months following the transfer.
Who must give the undertaking, and in which document?
Each of the heirs, donees or legatees gives the undertaking personally, in the inheritance declaration or in the deed of gift. Point c of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, provides that "each of the heirs, donees or legatees gives the undertaking, in the inheritance declaration or the deed of gift, for himself and his successors taking by way of gift (ayants cause à titre gratuit), to retain the shares or units transferred for a period of six years from the date of expiry of the period referred to in point a". The six-year individual undertaking therefore appears in the instrument of transfer itself, and not in a separate agreement. It also binds the signatory's successors taking by way of gift, that is to say those who would subsequently receive those shares without consideration.
Must an intermediate company also retain its shareholding?
Yes. The retention obligations are assessed at each level of the chain of shareholdings, both for the two years of the collective undertaking and for the six years of the individual undertaking. Where the shares are held through an intermediate company, point e of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, provides that "each of the companies making up the chain of shareholdings shall send […] a certificate attesting to compliance, at its own level, with the retention obligations laid down in points a and c". Point a is that of the two-year collective undertaking, point c that of the six-year individual undertaking.
Can I give the shares to my children during the individual undertaking?
Yes, in favour of your descendants, and on condition that they continue the six-year undertaking through to its term. Point i of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, rules out any withdrawal of the exemption in the event of a gift made during the individual undertaking "provided that the donee or donees are the descendant or descendants of the donor and that the donee or donees continue the undertaking laid down in point c through to its term". The six years therefore do not start again from zero: the descendant continues the undertaking until the term already fixed. This relaxation applies only to the descendants of the donor: a gift made, during the individual undertaking, to a person who is not a descendant of the donor does not fall within it.
Does a merger or a sale between signatories cause the exemption to be lost?
Not necessarily: the provision lays down relaxations, each with its own conditions. Where the condition specific to the transaction is met, the exemption from transfer duties on gifts and inheritances, which covers 75% of the value of the shares or units transferred, is not called into question. The shareholding thresholds laid down in point b of article 787 B of the French Tax Code, to which the first of those relaxations refers, are at least 10% of the financial rights and 20% of the voting rights where the shares or units are admitted to trading on a regulated market and, failing that, at least 17% of the financial rights and 34% of the voting rights, including the shares or units transferred.
| Transaction | What article 787 B of the French Tax Code provides |
|---|---|
| Sale of shares by a signatory to the collective undertaking | Exemption not called into question for the other signatories if the shares they hold together comply with the thresholds in point b and are retained until the original term, or if the transferee joins the collective undertaking, which is then renewed for a minimum of two years (e bis) |
| Sale or gift to another shareholder party to the collective undertaking | Called into question "only in respect of the shares or units sold or given" (e ter) |
| Merger, demerger, capital increase | No withdrawal if the retention undertaking concerned, whether that in point a or that in point c, is complied with until its term and if the shares received are retained until that same term (g and h) |
Who must run the company, and for how long?
Does my son have to run the company for the Dutreil pact to apply?
No, the heir or the donee is not required to run the company. Point d of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, requires only that "one of the shareholders referred to in a or one of the heirs, donees or legatees referred to in c actually carries on within the company […] his main professional activity […] or one of the functions listed in 1° of 1 of III of article 975". The provision therefore opens up an alternative: the condition is satisfied just as well by a shareholder who signed the collective undertaking to retain the shares as by the person who receives the shares. In a family business transfer, the donor who signed the collective undertaking may keep the running of the company, and the condition is satisfied without the child who receives the gift taking any corporate office at all. To believe that the running of the company must necessarily fall on the person who receives the shares is a misreading, because d allows either one.
| Requirement under d | What article 787 B of the French Tax Code provides |
|---|---|
| Who may satisfy the condition | One of the shareholders who signed the collective undertaking to retain the shares provided for in a, or one of the heirs, donees or legatees bound under c |
| Which activity or which function | His main professional activity, or one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code |
| For which period | For the term of the collective undertaking provided for in a and for the three years following the date of the transfer |
| Separate condition, laid down in d bis | The shares or units are not recorded in an SME innovation account |
For how long must the management function be performed?
For the term of the collective undertaking and for the three years following the date of the transfer. Point d of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, adopts those two periods and no other. The three years run from the date of the transfer, and not from the end of the collective undertaking. The condition as to functions does not last six years. The six years are those of the individual undertaking to retain the shares in c, which concerns the retention of the shares and runs from the date of expiry of the period referred to in a, which presupposes a collective undertaking with a minimum term of two years in force on the day of the transfer.
Which functions exactly does the provision require?
Either the main professional activity, or one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code. Point d of article 787 B of the French Tax Code lays down those two limbs and refers, for the second, to the list in article 975 of the French Tax Code. One word governs the reading: the person must "actually" carry on that activity or perform that function within the company. That requirement is assessed over the term of the collective undertaking and over the three years following the date of the transfer.
Can the shares be recorded in an SME innovation account?
No, and this is a condition separate from the management condition. Point d bis of article 787 B of the French Tax Code provides that "the shares or units are not recorded in an SME innovation account referred to in article L. 221-32-4 of the French Monetary and Financial Code". That condition is additional to the condition as to functions laid down in d, and it concerns the recording of the shares or units themselves in such an account.
Does the undertaking deemed to have been given change the management condition?
Yes, the function must then have been performed for at least two years as at the day of the transfer. Paragraph b.2 of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, confines the undertaking deemed to have been given (engagement réputé acquis) to shares held for at least two years, in the proportions required by b, by a natural person alone or together with his spouse, his partner under a civil solidarity pact (pacte civil de solidarité) or his publicly acknowledged cohabiting partner, and provided that that person has carried on "for at least two years" his main professional activity or one of the functions in 1° of 1 of III of article 975 of the same code. The management condition then also looks to the past, without the condition in d ceasing to apply for the future.
Can a holding company benefit from the Dutreil pact?
Is my private asset holding company eligible for the Dutreil pact?
No: a company whose activity is the management of its own assets gives no entitlement to the 75% exemption. Article 787 B of the French Tax Code, in the wording resulting from Law no. 2026-103 of 19 February 2026 and in force since 21 February 2026, exempts from transfer duties on gifts and inheritances, up to 75% of their value, the shares or units in a company whose principal activity is industrial, commercial, craft, agricultural or professional. The same article states that "the carrying on by a company of an activity of managing its own movable or immovable assets" is not regarded as an industrial, commercial, craft, agricultural or professional activity. Managing a portfolio of securities or a property estate for one's own account is therefore not enough. The legislation does, however, reserve a particular treatment for the active holding company.
What is an active holding company?
It is the company whose principal activity is active participation in the conduct of the policy of its group. Article 787 B of the French Tax Code, in the wording resulting from Law no. 2026-103 of 19 February 2026, provides that "a company which, in addition to managing a portfolio of shareholdings, has as its principal activity active participation in the conduct of the policy of its group made up of companies controlled directly or indirectly, carrying on an industrial, commercial, craft, agricultural or professional activity, and to which it provides, where applicable and on a purely internal basis, specific administrative, legal, accounting, financial and property services, is nevertheless regarded as carrying on a commercial activity". Two requirements and one option are to be read in that sentence.
- The active involvement must be the principal activity. Article 787 B of the French Tax Code requires active involvement in the conduct of the group's policy "in addition to managing a portfolio of shareholdings": holding and managing shareholdings is not enough.
- The companies in the group must carry on an eligible activity. The group is made up of "companies controlled directly or indirectly, carrying on an industrial, commercial, craft, agricultural or professional activity".
- The services provided to the group are not a requirement. Article 787 B of the French Tax Code refers to specific administrative, legal, accounting, financial and property services only "where applicable and on a purely internal basis", and for the sole benefit of the companies in the group: the words "where applicable" make this an option.
For how long must the holding company remain an active holding company?
From the entering into of the collective undertaking to retain the shares until the end of the individual undertaking. Point c bis of article 787 B of the French Tax Code, in the wording in force since 21 February 2026, provides that the activity condition "must be satisfied from the entering into of the undertaking to retain the shares provided for in the first sub-paragraph of a and until the end of the undertaking to retain the shares provided for in c". Active involvement is therefore not assessed on the day of the gift or of the death alone: it must be verified throughout the collective undertaking, which runs for a minimum of two years, and then throughout the six years of the individual undertaking, which c causes to run from the date of expiry of the period referred to in a.
Can I contribute the shares to a holding company while the undertakings are running?
Yes, and the exemption is not called into question if four conditions are met. Point f of article 787 B of the French Tax Code, in the wording resulting from Law no. 2026-103 of 19 February 2026, rules out any calling into question of the 75% exemption where the shares are contributed to a holding company, provided that the following four conditions are met cumulatively.
| Condition laid down by point f of article 787 B of the French Tax Code | What the legislation requires |
|---|---|
| Gross assets of the company receiving the contribution | Made up, as to more than 50%, of shareholdings subject to the undertakings |
| Share capital and voting rights of the receiving company | At least three quarters held by the persons subject to the undertakings, the company being managed by one of them |
| Undertaking by the receiving company | To retain the shares contributed until the end of the undertakings |
| Undertaking by the persons subject to the undertakings | To retain the shares received |
What must each company in the chain of shareholdings do?
Issue a certificate attesting, at its own level, to compliance with the obligations to retain the shares. Where the holding is indirect, point e of article 787 B of the French Tax Code, in the wording in force since 21 February 2026, provides that "each of the companies making up the chain of shareholdings shall send to the persons subject to those undertakings […] a certificate attesting to compliance, at its own level, with the obligations to retain the shares provided for in a and c". The documentary obligation therefore runs all the way up the structure, and not only to the company whose shares were transferred: every tier must be in a position to produce that document.
Are the assets excluded from the exemption also excluded when they are held in a subsidiary?
Yes: the exclusion extends to the same assets held by a controlled company. Article 787 B of the French Tax Code, in the wording resulting from Law no. 2026-103 of 19 February 2026, excludes from the exemption the portion of the market value of the shares or units representing the value of the assets which are not exclusively used by the company for the purposes of the activity, and that exclusion extends to the same assets held by a company controlled directly or indirectly within the meaning of 2° of III of article 150-0 B ter of the French Tax Code. The assets concerned are assets used for hunting, property used for fishing, passenger vehicles, yachts, sailing or motor pleasure boats and aircraft, jewellery, precious metals and works of art, collectors' items or antiques, excluding those qualifying for the regime provided for in article 238 bis AB of the French Tax Code, racehorses or competition horses, wines and spirits, and dwellings and residences. Exclusive use is assessed over a period of at least three years before the transfer or, failing that, since their acquisition, and until the end of the undertaking provided for in c or, failing that, until the asset is disposed of.
Which certificates must be produced, and within what time limits?
How many certificates must be produced for a Dutreil pact?
Three certificates, at three different times. Point e of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, in force since 21 February 2026, provides for three of them: a certificate from the company supporting the inheritance declaration or the deed of gift, a certificate sent at the request of the French tax authorities within three months of that request, and a certificate sent within three months of the end of the undertaking to retain the shares referred to in point c. The same point e adds, where the shares are held indirectly, a certificate of a different nature: each of the companies in the chain of shareholdings provides it not to the tax authorities, but to the persons bound by the undertakings.
| Document to be produced | Trigger | Time limit | Purpose |
|---|---|---|---|
| Initial (attached to the deed) | Succession declaration or deed of gift | Attached to the deed | Conditions in points a and b satisfied up to the day of the transfer |
| On request (to the tax authorities) | Request from the tax authorities | Three months from the request | Conditions in points a to d complied with continuously since the date of the transfer |
| Final (to the tax authorities) | End of the undertaking to retain the shares in point c | Three months from that end date | Conditions in points a to d complied with until their end |
| Chain of shareholdings (to the persons bound by the undertakings) | Indirect holding of the shares | No time limit set by article 787 B | Compliance, at its own level, with the retention obligations provided for in points a and c |
Which certificate must be attached to the deed of gift?
The inheritance declaration or the deed of gift must be supported by a certificate from the company. Point e of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, requires it to certify that the conditions provided for in points a and b have been satisfied up to the day of the transfer: the collective undertaking to retain the shares, for a minimum term of two years, in force on the day of the transfer, and the thresholds in point b, that is at least 10% of the financial rights and 20% of the voting rights if the shares or units are admitted to trading on a regulated market or, failing that, at least 17% of the financial rights and 34% of the voting rights, including the shares or units transferred. It is prepared before signing.
What should be done if the tax authorities ask for a certificate?
The time limit is three months from the request. Article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, provides that the heir, the donee or the legatee is to send, at the request of the tax authorities and within three months of that request, a certificate provided to that person by the company, certifying that the conditions provided for in points a to d have been complied with continuously since the date of the transfer. The obligation arises only if the tax authorities trigger it. The document is about continuity: the collective undertaking to retain the shares in point a, the thresholds in point b, the undertaking to retain the shares in point c and the condition in point d, under which one of the shareholders referred to in point a or one of the heirs, donees or legatees referred to in point c actually carries on in the company that person's main professional activity or one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code, throughout the term of the undertaking provided for in point a and during the three years following the date of the transfer.
Is a certificate required at the end of the undertaking to retain the shares?
Yes, within three months of the end of the undertaking to retain the shares in point c, and without any prior request from the tax authorities. Within that period, the heir, the donee or the legatee sends the tax authorities a certificate, provided to that person by the company, certifying that the conditions provided for in points a to d of article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, have been complied with until their end. Each has its own end date: the undertaking to retain the shares in point c runs for six years from the date of expiry of the period referred to in point a, whereas the condition as to functions in point d is measured over the term of the undertaking provided for in point a and during the three years following the date of the transfer. The three-month period runs from the end of the undertaking in point c, not from the date of the transfer.
Who certifies when the shares are held through a holding company?
Each company in the chain certifies at its own level. Where the shares are held indirectly, article 787 B of the French Tax Code, in the version resulting from Law no. 2026-103 of 19 February 2026, provides that each of the companies making up the chain of shareholdings is to provide the persons bound by those undertakings with a certificate certifying compliance, at its own level, with the retention obligations provided for in points a and c. Two interposed companies mean two more certificates to gather. The legislation sets no time limit for these certificates internal to the chain: they feed into those which the heir, the donee or the legatee must, for their part, send to the tax authorities. The constraint is less the form than the record-keeping: it must be possible to certify, on the day the tax authorities ask and then at the end of the undertaking in point c, that the conditions in points a to d have been complied with.
Does the 50% reduction for a donor under the age of seventy add to the 75% exemption?
What does article 790 of the French Tax Code provide?
A 50% reduction in the duties, confined to gifts in full ownership made by a donor under the age of seventy. Article 790 of the French Tax Code, in force since 31 July 2011, provides that gifts in full ownership of the shares or units in a company which meet the conditions of article 787 B of the French Tax Code benefit from a 50% reduction in the duties assessed under article 777 of the French Tax Code and the articles following it, where the donor is under the age of seventy. Four requirements, therefore: a gift, full ownership, the conditions of article 787 B of the French Tax Code met, a donor under the age of seventy.
| Transfer | 50% reduction under article 790 of the French Tax Code |
|---|---|
| Gift of securities in full ownership, conditions of article 787 B met, donor under the age of seventy | Yes, on the duties assessed |
| Gift of securities in full ownership, donor aged seventy or over | No, the age condition is not met |
| Gift of securities with a reserved usufruct | No, the provision covers only full ownership |
| Transfer on death | No, the provision does not deal with it |
| Gift of a sole proprietorship in full ownership, conditions of article 787 C met, donor under the age of seventy | Yes, on the duties assessed, under II of article 790 |
Does the 50% reduction apply to a transfer on death?
No, the 50% reduction of article 790 of the French Tax Code does not apply to transfers on death. Article 790 of the French Tax Code covers only gifts in full ownership and contains nothing on transfers on death. To write that the heirs of a deceased person under the age of seventy obtain a 50% reduction in the transfer duties on gifts and inheritances is wrong. An inheritance may give entitlement to the 75% exemption of article 787 B of the French Tax Code, in the wording resulting from Law no. 2026-103 of 19 February 2026, in force since 21 February 2026. Not to the 50% reduction.
Can the 75% exemption and the 50% reduction be added together?
No, the two benefits do not add together, because they do not apply to the same quantity. The 75% exemption of article 787 B of the French Tax Code applies to the value of the shares or units transferred, and therefore to the basis of assessment. The 50% reduction of article 790 of the French Tax Code applies to the duties assessed, and therefore to tax already calculated. Two quantities, two stages. The overall rate of 87.5% sometimes put forward confuses precisely the basis of assessment and the duties: no single rate sums up the transaction, the duties have to be assessed.
Does a gift with a reserved usufruct give access to the 50% reduction?
No, the 50% reduction of article 790 of the French Tax Code covers only gifts in full ownership. A gift with a reserved usufruct may, on the other hand, fall within the Dutreil pact: article 787 B of the French Tax Code applies in the case of a gift with a reserved usufruct on condition that the voting rights of the usufructuary are limited by the articles of association to decisions concerning the allocation of profits. Retaining the usufruct therefore leaves the 75% exemption available, subject to that condition in the articles of association, and closes off the 50% reduction of article 790 of the French Tax Code.
Does the 50% reduction apply to the gift of a sole proprietorship?
Yes, II of article 790 of the French Tax Code provides for the same 50% reduction in the duties assessed. Gifts in full ownership of all, or of an undivided share of all, the assets used in the operation of a sole proprietorship (entreprise individuelle) which meet the conditions of article 787 C of the French Tax Code benefit from a 50% reduction in the duties assessed where the donor is under the age of seventy. Full ownership and a donor under the age of seventy: the same requirements as for the shares or units in a company. The only thing that changes is the provision whose conditions must be met, article 787 C of the French Tax Code instead of article 787 B.
The mistakes you read everywhere about the 2026 Dutreil pact
Did the reform of the Dutreil pact come into force on 1 January 2026?
No: it has applied since 21 February 2026. Article 787 B of the French Tax Code, as amended by Law no. 2026-103 of 19 February 2026, article 8, has been in force since 21 February 2026. The reform is therefore neither a finance act nor applicable to transfers occurring on or after 1 January 2026.
| What you read | What the legislation says |
|---|---|
| A finance act applicable from 1 January 2026 | Law no. 2026-103 of 19 February 2026, article 8, in force since 21 February 2026 |
| A 50% reduction on death | Article 790 covers only gifts in full ownership |
| 87.5% exemption by combining the two | 75% on the value of the shares, 50% on the duties assessed |
| Excluded assets without hunting or fishing | Hunting and fishing open the list of excluded assets |
| Use assessed only before the transfer | Three years before the transfer, and until the end of the individual undertaking or, failing that, until the disposal of the asset |
| The heir must run the business for six years | A shareholder party to the collective undertaking or an heir, for the duration of the collective undertaking and for the three years following the transfer |
| Collective undertaking with no threshold | 10% of the financial rights and 20% of the voting rights where the shares are admitted to trading on a regulated market, failing that 17% and 34% |
| An overall period of eight years | Six years from the expiry of the period of the collective undertaking |
Does the 50% reduction apply where the director dies before the age of seventy?
No: article 790 covers only gifts in full ownership. In force since 31 July 2011, article 790 of the French Tax Code restricts the 50% reduction to gifts in full ownership of shares or units satisfying the conditions of article 787 B of the same code, where the donor is under the age of seventy. It says nothing about transfers on death.
Does combining the two mechanisms give an 87.5% exemption?
No: the two rates do not add up. The exemption under article 787 B of the French Tax Code applies to the value of the shares or units, up to 75%. The reduction under article 790 of the French Tax Code applies to the duties assessed under articles 777 et seq. The one operates on the basis of assessment, the other on the tax already calculated: to announce an 87.5% exemption confuses the two.
Are assets used for hunting and fishing excluded from the exemption?
Yes: hunting and fishing open the list of excluded assets. Article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, excludes from the exemption the proportion of the market value of the shares or units representing assets used for the exercise of hunting and assets used for the exercise of fishing which are not used exclusively by the company for its business for a period of at least three years before the transfer or, failing that, since their acquisition, and until the end of the individual undertaking or, failing that, until the disposal of the asset. The use requirement therefore does not look only to the past, and the legislation requires exclusive use. The same list comprises passenger vehicles, yachts, sailing or motor pleasure boats and aircraft, jewellery, precious metals and works of art, collectors' items or antiques, excluding those which qualify under the regime of article 238 bis AB of the same code, racehorses or competition horses, wines and spirits, and dwellings and residences.
Does my son have to run the business for six years?
No: the role may be performed by another shareholder, and it is required for the duration of the collective undertaking and for the three years following the transfer. Point d of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, requires that one of the shareholders party to the collective undertaking or one of the heirs, donees or legatees actually carry on in the company his or her main professional activity or one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code, for the duration of the collective undertaking and for the three years following the date of the transfer. The six years are those of the individual undertaking to retain the shares, which is a separate condition.
What proportion of the share capital must the collective undertaking cover?
At least 10% of the financial rights and 20% of the voting rights where the shares are admitted to trading on a regulated market, failing that 17% and 34%. Point b of article 787 B of the French Tax Code, in its wording resulting from Law no. 2026-103 of 19 February 2026, requires the collective undertaking to retain the shares to cover at least 10% of the financial rights and 20% of the voting rights of the shares or units admitted to trading on a regulated market or, failing that, at least 17% of the financial rights and 34% of the voting rights, including the shares or units transferred. Those thresholds must be complied with throughout the undertaking.
Do the shares have to be retained for six years or eight years?
Six years, running from the expiry of the period of the collective undertaking. Point c of article 787 B of the French Tax Code requires each of the heirs, donees or legatees to undertake, in the inheritance declaration or the deed of gift, to retain the shares or units transferred for a period of six years from the date of expiry of the period of the collective undertaking provided for in a, which has a minimum duration of two years and must be running on the date of the transfer. No overall period of eight years appears in the legislation: two undertakings follow one another, they do not add up mechanically.
Frequently asked questions on the Dutreil pact
Does the 2026 Dutreil pact come from a finance act for 2026?
No. The reform of the Dutreil pact appears in no finance act: article 787 B of the French Tax Code was amended by Law no. 2026-103 of 19 February 2026, article 8. That wording has been in force since 21 February 2026, and not since 1 January 2026. No transitional clause appears in article 787 B of the French Tax Code.
Does the 50% reduction apply to gifts and to inheritances?
To gifts only. Article 790 of the French Tax Code, in force since 31 July 2011, covers gifts in full ownership of shares or units which satisfy the conditions of article 787 B of the French Tax Code and grants them a 50% reduction in the duties assessed where the donor is under seventy years of age. That provision contains nothing on transfers on death. To assert that the heirs of a deceased person under seventy benefit from a 50% reduction is therefore inaccurate. An inheritance may, on the other hand, give rise to the 75% exemption in article 787 B of the French Tax Code, which covers shares or units transferred on death.
Is there an overall exemption rate for the Dutreil pact?
No. The 75% exemption in article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, applies to the value of the shares or units transferred, and therefore to the basis of assessment of the transfer duties on gifts and inheritances. The 50% reduction in article 790 of the French Tax Code, for its part, applies to the duties assessed under articles 777 et seq. of the French Tax Code, and therefore to the tax already calculated. Two different quantities, two different stages: the percentages do not add up and no single rate sums them up. The duties have to be assessed.
Are the Dutreil pact thresholds the same for a listed company and for an unlisted company?
No. Article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, requires the collective undertaking to retain the shares to cover at least 10% of the financial rights and 20% of the voting rights where the shares or units are admitted to trading on a regulated market. Failing that, the threshold is 17% of the financial rights and 34% of the voting rights, including the shares or units transferred. Those thresholds must be complied with throughout the collective undertaking.
How far in advance must a transfer with a Dutreil pact be prepared?
Two years at least. Article 787 B of the French Tax Code, in force since 21 February 2026, presupposes a collective undertaking to retain the shares with a minimum term of two years, running at the date of the transfer. Where no undertaking has been signed, the same article deems it to have been given where the shares or units have been held for at least two years, at the required thresholds, by an individual alone or together with his or her spouse, his or her partner under a civil solidarity pact or his or her publicly acknowledged cohabiting partner, provided that that person has for at least two years carried on his or her main professional activity in the company or held one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code. Both routes therefore require a two-year history.
What becomes of the exemption if the shares are cancelled by reason of losses or of court-ordered liquidation?
It is not called into question. Article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, provides that the cancellation of the shares or units by reason of losses or of court-ordered liquidation (liquidation judiciaire) does not entail the loss of the 75% exemption, as regards both the two-year collective undertaking and the six-year individual undertaking. The same article treats in the same way a merger, a demerger referred to in article 817 A of the French Tax Code and an increase in share capital, provided that the undertakings are complied with until their term and that the shares or units received are retained until that same term.
Can I remain a director of the company after giving away my shares?
Yes, and the legislation is satisfied with that. Article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, requires one of the shareholders who signed the collective undertaking, the donor included, or one of the heirs, donees or legatees who gave the individual undertaking, actually to carry on his or her main professional activity in the company or to hold one of the functions listed in 1° of 1 of III of article 975 of the French Tax Code. The donee therefore does not have to run the company. That office must be held during the term of the collective undertaking and during the three years following the date of the transfer, and not for six years.
Must the articles of association be amended before a gift with the usufruct reserved?
Yes, if the articles of association do not already limit the usufructuary's voting rights. Article 787 B of the French Tax Code, in force since 21 February 2026, applies to a gift with the usufruct reserved only on condition that the usufructuary's voting rights are limited by the articles of association to decisions concerning the allocation of profits. The limitation must therefore appear in the articles of association. The 50% reduction in article 790 of the French Tax Code, for its part, covers only gifts in full ownership.
Must a second home be taken out of the company before the shares are transferred?
The legislation does not require it. Article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, places dwellings and residences among the assets whose value is not exempt: the 75% exemption does not apply to the fraction of the market value of the shares or units representing those assets where they are not exclusively used for the company's business activity. That exclusive use must exist for a period of at least three years before the transfer or, failing that, since their acquisition, and must continue until the end of the six-year individual undertaking or, failing that, until the asset is disposed of. The same article extends the exclusion to assets of the same nature held by a company controlled directly or indirectly.
Can shares be transferred to a perpetuity fund while benefiting from the Dutreil pact?
Yes, in full ownership. Article 787 B of the French Tax Code, as worded following Law no. 2026-103 of 19 February 2026, exempts from transfer duties on gifts and inheritances, up to 75% of their value, shares or units transferred on death, inter vivos or, in full ownership, to a perpetuity fund referred to in article 177 of Law no. 2019-486 of 22 May 2019. For that route, the legislation therefore confines the exemption to a transfer in full ownership. The other conditions in article 787 B of the French Tax Code, a two-year collective undertaking, a six-year individual undertaking, the condition as to functions and the certificates, remain applicable.
A family transfer to prepare?
The firm checks eligibility for the Dutreil pact, drafts the undertakings and aligns the timetable with the six years of retention. An initial 10-minute discussion makes it possible to frame your transaction.