Employee Share Plans in Europe and the USA - Sorainen

Employee Share Plans in Europe and the USAGreecetax scale is increased progressively through thresholds of €31,600 and€100,000 and, for income over €100,000, the tax rate is 45% 44.1.2 Social security contributions: No social security contributions willarise where an employee acquires shares free of charge or at a discountto market value (although the employee will be subject to social securitycontributions on his salary, including any amount of salary used to payfor the shares (at a rate of 16% for the 2010 tax year). 54.2 Employer tax and social security contributions4.2.1 Corporation tax deduction: If a parent or foreign company in the samegroup recharges the cost of providing shares to its Greek employingsubsidiary under a written recharge agreement, the recharged amountshould be accounted for as a salary cost and in principle should bedeductible by the subsidiary in Greece.4.2.2 Social security contributions: A Greek employer must pay socialsecurity contributions on the amount subject to income tax at a rate of28.06% for the 2010 tax year. 64.3 Tax withholdingNo tax withholding is required. At the start of the year following the year in whichthe shares were acquired, the employer must provide a certificate to theemployee with the information necessary (date of acquisition of shares, value ofshares, number of shares purchased etc) so that the employee can include theincome in his/her annual income tax return.456The tax rate is 0% for income up to €12,000, provided that the taxpayer retains receipts for goods andservices purchased for his/her personal or dependants' needs.An employee is obliged to pay social security contributions each month. The payment of social securitycontributions is independent of taxation in Greece. Regardless of the Greek employee’s participation inan employee share plan, social security contributions must be paid once a month before the paymentof salary takes place. In the case of a salary-based relationship, social security contributions must bewithheld and paid by the Greek employer each month. Each Greek employer is required to pay insocial security contributions at a fixed percentage of the Greek employee’s monthly salary including thetaxable value of employee share benefits. Social security contributions are equivalent to 44.06% of theGreek employee’s monthly salary. From this amount, 16% is paid by the Greek employee and withheldfrom his/her salary by the Greek employer.The social security contributions must be accounted for before the securities are offered to employees.UK/1729295/03 90 September 2010