Employee Share Plans in Europe and the USA - Sorainen

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Employee Share Plans in Europe and the USAGreece5. Taxation of share options5.1 Employee tax and social security contributions5.1.1 Grant: A tax charge arises at the time an amount is paid by theemployee for the shares. Therefore, there is no tax charge on the grantof a share option.Exercise: As noted above, a tax charge arises at the time the employeepays for the shares, i.e. normally at exercise. (If no amount is payablefor the shares then it is considered that the taxable date is when theemployee "exercises" the option, as defined in the relevant plan rules.)The tax charge is on the difference between the stock exchange value ofthe shares when the employee pays for the shares and the amount paid(if any). Income tax is charged on a progressive scale, throughthresholds of €31,600, and €100,000. Income over €100,000 is taxed ata rate of 45%.5.1.2 Social security contributions: No social security contributions willarise in relation to the acquisition of the shares under the option(although the employee is subject to social security contributions on hissalary, including any amount of salary that is used to fund the exerciseprice (at a rate of 16% for the 2010 tax year)).5.2 Employer tax and social security contributions5.2.1 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.5.2.2 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. 75.3 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.UK/1729295/03 91 September 2010
Employee Share Plans in Europe and the USAGreece6. Taxation of share disposals 8Capital gains realised on a disposal of shares purchased before the end of 2010are tax-free.For shares purchased on or after 1 January 2011, the following tax regime willapply:• If the shares are sold within a period of twelve months from the date ofacquisition, there will be a tax charge on the difference between the salevalue of the shares and the stock exchange value of the shares at the timeof the acquisition of shares. This taxable amount is added to income fromother sources and will be taxed based on an individual's tax scale. Uponsale of the shares, a tax withholding must be applied, which is offsetagainst the ultimate tax liability of the employee. The tax withholding is20% if the shares are sold within a period of three months from the date ofacquisition and 10% if the shares are sold between four and twelvemonths from the date of acquisition. The Societe Anonymes ofInvestment Services and the bank institutions, which maintain the shareaccounts of their clients, must make the tax withholding and provide theirclients with the relevant tax withholding certification.• If the shares are sold more than twelve months from the date ofacquisition, the capital gain realised upon a disposal of the shares is taxfree.7. Employee benefit trusts7.1 A Greek employee who is a beneficiary of a discretionary employee benefit trustwill not be taxable for that reason alone but he may be taxed on the receipt ofbenefits from the trust.7.2 Employee benefit trusts are not recognised under Greek law and a corporationtax deduction will not be available for contributions made to a trust, for exampleto allow the trust to purchase shares in the market.8. Data protectionEmployee consent must be obtained for the collection, processing and worldwidetransfer of personal data in connection with an employee share plan. 978The social security contributions must be accounted for before the securities are offered to employees.Art. 38 Income Tax Law 2238/1994.UK/1729295/03 92 September 2010
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Employee Share Plans in Europe and the USA - Sorainen

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