Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USAThe Netherlands(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%.5.3 Favourable tax regimeAlthough there are no tax approved employee share plans in the Netherlands, itis possible to replicate savings-related employee share purchase and/or shareoption plans to a certain extent by using a special employee savings plan. Theplan allows an employee to make contributions to a special savings account on apre-tax basis (maximum of €613 a year for the 2010 tax year). The contributionscan be invested in shares in the employing company (or a group company). Inaddition, the contributions can be made in the form of shares in the employingcompany (or a group company), in which case the maximum amount is doubled.There are a number of requirements, including that the savings must be held forat least four years. The employing company is obliged to pay a 25% tax chargeon the contributions.5.4 Tax withholdingThe employer must withhold any income tax and social security due. 106. Taxation of share disposalsThe employee is not subject to capital gains tax or income tax on a disposal ofshares.7. Employee benefit trusts7.1 If a resident of the Netherlands is a potential beneficiary of an employee benefittrust, he will not be subject to tax simply by being a potential beneficiary.7.2 The receipt of benefits from an employee benefit trust by an employee willconstitute taxable income in the hands of that employee 11 and the benefit maybe subject to income tax and employee and employer social security if the costof the benefit is borne by the employer.7.3 The Dutch employing company can only claim a tax deduction for paymentsmade to an employee benefit trust if (i) the employer has no influence on the1011As a rule, the Dutch employing company is responsible for the withholding and payment of the relevantamounts regardless of whether it, or the foreign parent company, granted the option or awarded theshares.Taxable at progressive income tax rates.UK/1729295/03 141 September 2010
Employee Share Plans in Europe and the USAThe Netherlandstrust and (ii) the employer is not entitled to any payments from the trust (in otherwords, the payments made to the trust must have been irrevocably made by theemploying company).8. Data protection8.1 The processing of personal data by the Dutch employer in the context of anemployee share plan must be carried out in accordance with the Dutch DataProtection Act. 12This Act requires personal data to be processed (i) for specified and legitimatepurposes, (ii) in accordance with the law and (iii) in a careful and propermanner. 138.2 Under the Dutch Data Protection Act, the employer is required to inform itsemployees of the purpose of the intended data processing and to provide therelevant contact details before the personal data is collected. 148.3 In principle, all personal data processing activities must be notified to the DutchData Protection Commission (College Bescherming Persoonsgegevens) beforethe collection of the personal data. 158.4 If, in connection with an employee share plan, the personal data of employees isbeing transferred to countries outside the EEA, additional requirements must bemet. In principle, transfers of personal data to such countries are only permittedif the recipient country provides an adequate level of protection for such data.However, there are a number of ways of legitimising an international transfer,12131415The Dutch Data Protection Act (Wet bescherming persoonsgegevens, the "DPA") has implemented theEU Directive on Data Protection (95/46/EC). Under the DPA, the Dutch employer shall in principle beconsidered as the "data controller" with respect to the transfer of personal data of employees.Articles 6 and 7 of the DPA. Furthermore, in order for the processing to be legitimate a generalprocessing condition needs to be met, the relevant condition in the case of employee share plans beingthat the processing is necessary to perform a contract to which the employee is party, or in order totake steps at the request of the employee prior to entering into a contract. Another relevant processingground could be that the processing is necessary to achieve the legitimate interests of the employer orthe recipient, and provided that the (privacy) interests of the employee involved do not prevail overthese interests.Article 33 of the DPA. Depending on factors such as the sensitivity of the data and whether personaldata will be internally transferred, the employer may be required to provide the employee with furtherinformation as regards the processing. The employer could, for example, provide the information byattaching a data protection policy to the employee share plan.Article 27 of the DPA. Depending on the type of personal data that will be processed and for whatpurpose, the data processing may be exempt from notification under the Dutch Decree onStandardised Exemptions (Vrijstellingsbesluit).UK/1729295/03 142 September 2010
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Employee Share Plans in Europe and the USA - Sorainen

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