Employee Share Plans in Europe and the USA - Sorainen

More documents

Recommendations

Info

Employee Share Plans in Europe and the USAThe Netherlandsthat it is expected that the financial assistance prohibition for BV's will beabolished following a legislative proposal that is expected to enter into force inthe course of 2011).3.2 Dutch subsidiary of non-Dutch company: From a Dutch law perspective it isarguable that the general restriction on a Dutch subsidiary providing financialassistance (e.g. a loan) for the acquisition of shares in its Dutch parent companyshould not apply where the parent company is not Dutch. However, there is nospecific case law on this point and the position is not free from doubt.4. Taxation of share acquisitions4.1 Employee tax and social security contributions 74.1.1 Tax: An employee who acquires shares in his employing company or itsparent company free of charge or at a discount to market value willnormally be liable to pay income tax. The tax charge is on the differencebetween the market value of the shares at the time of acquisition and theamount, if any, paid for the shares. For the 2010 tax year theprogressive rates of income and social security charges range from33.45% to 52%.4.1.2 Social security contributions: An employee will be subject to generalsocial security contributions as part of the income tax due (thesecontributions are capped on income at €33,189 for 2010). The rates ofgeneral social security contributions are included in the progressiveincome tax rates referred to in paragraph 4.1.1.4.2 Employer tax and social security contributions4.2.1 Corporation tax deduction: In respect of shares awarded after 24 May2006, the amount of any discount charged to the Dutch company by theforeign parent company or, as the case may be, the difference betweenthe arm’s length purchase price and the lower purchase price charged tothe employee is no longer deductible for corporate income purposes.Furthermore, the Dutch employing company is no longer able to deductthe cost of establishing and administering a share plan to enableemployees to acquire shares in a foreign parent company. The costs ofcash-settled stock appreciation rights should still qualify for a taxdeduction if paid by, or charged to, a Dutch company.7Please note that the comments made in this section assume that the Dutch rules on so-called "lucrativeinvestments" do not apply. (In general, these rules do not apply to "regular" employee share plans.)UK/1729295/03 139 September 2010
Employee Share Plans in Europe and the USAThe Netherlands4.2.2 Social security contributions: Employer social security contributionswill be payable in respect of shares provided to employees for free or ata discount to the extent that the employee's income for the relevant year(excluding the share-based income) does not exceed €48,716 (i.e. suchcontributions are capped on income at this level). The rate of employersocial security contributions is approximately 11.6% for 2010.4.3 Tax withholdingThe employer must withhold any income tax and social security due. 85. Taxation of share options5.1 Employee tax and social security contributions5.1.1 Grant: No taxation of share options occurs at grant. 95.1.2 Exercise: Income tax will arise on the exercise of a share option on thedifference between the option exercise price and the market value of theshares at the time of exercise. For the 2010 tax year the progressiverates of income and social security charges range from 33.45% to 52%.Social security contributions:5.1.3 An employee will be subject to general social security contributions aspart of the income tax due (these contributions are capped on income at€33,189 for 2010). The rates of general social security contributions areincluded in the progressive income tax rates referred to in paragraph5.1.2.5.2 Employer tax and social security contributions5.2.1 Corporation tax deduction: For options granted after 24 May 2006 theamount of the taxable benefit for employees on exercise of the options isno longer tax deductible for the Dutch employing company. It should benoted that the costs of cash-settled stock appreciation rights will stillqualify for a tax deduction if paid by or charged to a Dutch company.5.2.2 Social security contributions: Employer social security contributionswill be payable where an employee's income for the relevant year89The Dutch employing company is responsible for the withholding and payment of the relevant amountsregardless of whether it, or the foreign parent company, granted the option or awarded the shares.As from 1 January 2005 the regime, whereby the employee (jointly with the employer) could elect to betaxed (i) at grant (or if later, vesting) or (ii) upon exercise, was abolished.UK/1729295/03 140 September 2010
Page 1 and 2:
Employee Share Plansin Europe and t
Page 3 and 4:
Employee Share Plans in Europe and
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19:
Page 22 and 23:
Page 24 and 25:
Page 26 and 27:
Page 28 and 29:
Page 30 and 31:
Page 32 and 33:
Page 34 and 35:
Page 36 and 37:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96: Employee Share Plans in Europe and
Page 145: Employee Share Plans in Europe and
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
show all

Employee Share Plans in Europe and the USA - Sorainen

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?