Taxation stock options belgium

Please contact customerservices lexology. Companies taking advantage of these regimes can provide a fiscally efficient, and hence very attractive, method of both retaining and incentivising their employees. Qualified share option plans are particularly popular with larger companies and are typically used as means to incentivise executive employees.

On the 60th day following the offer of a qualifying option i. These percentages may however be halved to just 7. In addition, if an employee has paid a contribution in order to receive the option, this contribution may be deducted from the taxable benefit. No social security contributions will arise in relation to the amount that is subject to income tax on grant unless the exercise price is less than the market value of the shares at the time of grant.

On vesting of a qualifying option i.

Stock Options in Belgium: Taxation at Grant or Upon Exercise?

On exercise of a qualifying option, unless the terms of the option have changed, there should be no further charge to income tax. On the sale of the shares resulting from the exercise of a qualifying option, any gain that is realised is tax exempt.

Employees cannot recover the personal income tax paid on grant if they do not exercise their qualified share options. Companies can offer participation plans if they are both:.

Any company that has distributed at least two dividends in the previous three accounting years may offer such a share purchase plan. On subscription of the shares, provided all the necessary conditions are met, there will be no income tax or social security contributions due from the employee. Furthermore the employee is also entitled to deduct from his taxable income the price paid in order to obtain the shares of his employer up to a maximum amount of EUR. On sale of the shares, no income tax or social security contributions should be payable.

The fiscal advantages outlined above provide an effective means of both rewarding employees and incentivising them. Companies wishing to provide share based incentives to their Belgian employees may therefore wish to consider whether a Qualified Share Option Plan, Participation Plan or Share Purchase Plan should be utilised to enhance the motivation and retention of their workforce.

This briefing is correct as at October 17, and the tax treatment described above can change. It is intended as general guidance only and is not a substitute for detailed advice in specific circumstances.

If you are interested in submitting an article to Lexology, please contact Andrew Teague at ateague GlobeBMG. Martha van den Beld Legal Counsel TOTAL Nederland NV.

Tax treatment of employee stock options in Belgium - IBFD

We use cookies to customise content for your subscription and for analytics. If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy. Newsfeed Navigator Analytics Track Discover. Share Facebook Twitter Google Plus Linked In. Follow Please login to follow content. Register now for your free, tailored, daily legal newsfeed service. Industrial engineering sector legal update: Belgium October 19 Belgium offers a number of special tax regimes for share based initiatives.

In Belgium the following share plans are typically used to incentivise employees: Share Option Plans; or Participation Plans; or Share Purchase Plans. The 60th day is the date upon which the option is deemed to be granted.

The main characteristics of qualifying share option plans include: Tax Treatment On the 60th day following the offer of a qualifying option i. Some Pitfalls Income tax can arise if: Companies can offer participation plans if they are both: In order to qualify: The main characteristics of a participation plan include: The maximum differentiation ratio is 1: Tax Treatment No income tax arises in respect of the profits distributed under a participation plan; The profit distribution is however subject to a special withholding tax and is owed by the employer to the Belgian State within 15 days of the distribution of profits under a plan.

The tax rate is currently: No social security contributions arise in respect of the profits distributed by way of shares; Where profits are distributed by way of cash, a solidarity contribution arises. The current rate of this charge is The standard rate is currently This tax needs to be withheld on the sale price by the selling bank or stock exchange.

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Tax Treatment On subscription of the shares, provided all the necessary conditions are met, there will be no income tax or social security contributions due from the employee. Conclusion The fiscal advantages outlined above provide an effective means of both rewarding employees and incentivising them. Eversheds Sutherland International LLP - Mathew Gorringe.

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