Equity tax
Employee Equity Tax in Europe
Employee equity is taxed at different moments in different countries. The same option grant can be taxed at grant in Belgium, at exercise in the Netherlands and only at sale under a qualifying UK scheme. This hub sets out the rules per instrument and per country.
Equity tax rules across European countries
Employee equity tax
Every equity plan has a taxable moment: grant, vesting, exercise or sale. Choosing the instrument sets that moment, and the moment decides whether an employee owes tax before there is any cash to pay it.
Stock option tax
Stock options are the most common startup instrument and the one with the widest tax differences in Europe. The qualifying regimes are worth the paperwork because they usually move the charge to the sale of the shares.
Share award tax
Giving real shares moves the tax to the front. The employee usually pays income tax on the value received at award, so the design question is how to make that value small and defensible.
Phantom share tax
Phantom shares are a contractual promise to pay cash based on share value. There is no equity and no register change, and tax is simple: employment income when the cash is paid.
RSU tax
RSUs are taxed as employment income on the value of the shares when they are delivered. At a private company that can mean a tax bill on shares nobody can sell, which is why double trigger vesting is standard.
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