Employee

The employee is taxed on restricted stock upon grant and on RSUs upon vesting (may include personal assets tax).

The employee is subject to a flat tax of 15 percent on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5 percent on the gross sale price by non-residents.

Employer

Withholding & Reporting

Tax withholding and reporting are required upon grant for restricted stock and upon vesting of RSUs.

Deduction

Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

Employee

Generally, an employee is taxed on the spread upon purchase of restricted stock and the spread upon vesting/exercise on RSUs. Awards are taxed in the tax year in which they are granted. However, if they are subject to a “real risk of forfeiture,” deferral of tax is possible.

The conditions for tax deferral for restricted stock are limited. Generally, restricted stock is generally subject to income tax upon the earlier of vesting (and the cessation of any restrictions) or 15 years from grant.

Broadly speaking, RSUs are treated, for taxed purposes, like options. Employees may defer the tax payable where there is a “real risk of forfeiture” of the RSUs or 15 years from grant, provided certain conditions are met.

If a sale occurs within 30 days of a taxable event, the sale is treated as a taxable event, and the sale price is used to calculate the tax payable.

If a taxable event occurs without a sale within 30 days, and the shares are subsequently sold, generally only 50 percent of the capital gain is taxed if the shares are held by the employee (not through a company) for at least 12 months. 

In addition, the beneficial tax treatment is available for startup companies meeting certain requirements. Where the requirements are met, the employee will only pay tax on the capital gain on the sale of the shares.

Restricted stock and RSUs granted between July 1, 2009 and July 1, 2015 are subject to a different tax regime.

Employer

Withholding & reporting

Tax withholding is not required unless the employee does not provide their employee tax file number.

The employer is required to report income received by an employee from restricted stock and RSUs to both the employee and the Australian Taxation Office, and the employee is required to report such income on their annual tax return.

Benefits received by employees in some Australian states or territories may be included in the determination of employer payroll tax and, in some circumstances, in the determination of premium for workers compensation insurance.

Deduction

Reimbursement made to the parent company for the cost of the benefits, pursuant to a written agreement, should enable the subsidiary to deduct such cost from its taxable income.

Employee

Benefits from restricted stock are taxed upon grant. RSUs are taxed upon vesting.

Shares acquired before January 1, 2011: gains from the sale of shares held more than 12 months generally are not taxed. If the shares were held less than 12 months gains are taxed.

Gains from the sale of shares acquired on or after January 1, 2011 are subject to tax irrespective of the holding period.

Employer

Withholding & Reporting

Tax withholding and reporting are required.

Deduction

Reimbursement of the parent company for the cost of the benefit pursuant to a written reimbursement agreement should enable the subsidiary to deduct such cost from its income taxes.

Tax-favored

In case of a direct participation in the company and economic ownership of the employee (not only by means of funds) preferential tax treatment may apply if certain requirements are met.

Employee

Generally, restricted stock is taxed upon grant on the value of the stock.

Generally, RSUs are taxed on the value of the stock upon vesting.

A reduction of the tax base may be available if the employee is not allowed to sell the shares for at least 2 years.

There is no tax when the employee sells the shares, provided that the sale falls within the normal management of one’s private estate.

Employer

Withholding & Reporting

Withholding requirements and reporting obligations apply to Belgian entities offering RSUs to employees taxable in Belgium.

If the RSUs are granted by a foreign company, withholding and reporting obligations will not apply to the foreign company, but to (1) the local Belgian establishment of the foreign company (according to Belgian domestic law), if any, or (2) the Belgian subsidiary employing the relevant beneficiary. This reporting obligation applies irrespective of the fact that the local Belgian subsidiary is, or is not, involved in the grant of the RSUs.

Deduction

In situations where the subsidiary reimburses the parent company for the cost of the benefits, a deduction is generally allowed. A written reimbursement agreement is recommended. There is case law based on which the risk exists that the reimbursement may qualify as a capital loss on shares and would therefore not be deductible.

Employers and employees are encouraged to consult with their own tax advisors regularly to determine the consequences of taking or not taking any action concerning restricted stocks and RSUs, and to determine how the tax, social insurance, or other laws in Brazil apply to their specific situation.

Employee

Usually, the grant of restrict stock units does not give rise to a taxable event in Brazil. However, Brazilian tax authorities may have a different view, and understand that this could be seen as taxable event for employees, particularly if clearly treated as compensation by the issuer.

Upon vesting, the restricted stock units will be converted into shares and usually seen as income earned by employees, which shall result in the recognition of taxable income at the fair market value of the shares acquired and treated as employment (ordinary) income. Employees might need to self-assess and pay for such taxes if no withholding is made, especially if it is granted by a foreign company.

If employees sell any shares purchased under the plan, gains will be subject to capital gains taxation.

Employer

Withholding & Reporting

Tax withholding and reporting by the employer located in Brazil will be required if it is treated as compensation and treated as employment (ordinary) income.  Otherwise, if the employer is not located in Brazil, the employee will have to self-assess and report the income tax due. Capital gains tax calculation and reporting would be the employee's responsibility

Deduction

If restricted stock and RSUs are offered to all employees in Brazil and the subsidiary reimburses the parent company for the cost of the benefits, the subsidiary should be able to deduct such cost from its income taxes provided that it is treated as compensation, which could cause restricted stock and RSUs to be deemed employment (ordinary) income subject to social insurance contributions.

Employee

Restricted stock is taxed upon grant as employment income at a 100-percent inclusion rate.  The timing of recognition of the income differs in Canada and in the US so that foreign tax credits may become unavailable, unless a special election is filed.

If properly structured (including either (i) a vesting period of no more than 3 years or (ii) share-settled only), RSUs are taxed only upon settlement.

Upon the sale of shares, generally only 50 percent of any gain is taxable.  Where a capital loss arises, only 50 percent of the loss is deductible and it is only deductible against capital gains.  Such capital losses can be carried back 3 years and carried forward indefinitely.

Employer

Withholding & Reporting

Generally, withholding and reporting are required.

Deduction

For restricted stock or RSUs that are required to be settled in shares, the subsidiary is generally not entitled to claim a deduction even if it reimburses the parent company for the cost of the benefit of the restricted stock or share-settled RSUs pursuant to a written reimbursement agreement. As an exception, a deduction is available to the subsidiary if the employee opts to cash out such RSU instead of receiving shares on settlement.

The subsidiary can claim a deduction for the reimbursement of the cost of RSUs that may be settled in cash and/or shares at the company’s option.

Employee

Restricted stock and RSUs are usually taxed upon vesting when the employees satisfy the conditions to become owners of the stock. For tax purposes, RSUs are deemed as remuneration paid in kind.

The fair market value of the stocks constitutes employment income for employees.

Therefore, they are assessed along with other remunerations (eg, salaries, bonuses, wages, etc.) paid in the same tax period to determine the tax bracket and progressive rate of the employee.

Employer

Employment income is taxed progressively, ranging from 0 to 40 percent based on income levels. This tax is withheld monthly by employers acting as withholding agents.

When employers issue Restricted Stock Units (RSUs) directly to employees, they must withhold taxes upon vesting. If the RSUs consist of stocks from a related company (eg, the employer's parent company) and the employer covers the RSU costs (eg, reimburses the parent company), the employer remains liable to withhold employment taxes. Otherwise, employees must self-declare RSUs as part of their income.

If RSUs are granted by the foreign company but the local employer does not reimburse such costs, then  the local employee must self-withhold, declare and pay taxes for the RSUs.

Withholding & Reporting

If the local employer holds the position of withholding agent as explained above, it must file tax returns within the first days of the month following the payment of the remunerations or benefits derived from the plans. Otherwise, the eligible employee must self-withhold, declare and pay taxes as explained above.

Deduction

If benefits derived from the plan are paid directly or borne by the local employer, the inclusion of such benefits in the employee’s compensation (subject to the payroll process of the respective period) and the existence of supporting documentation signed by the employee (eg, annex where they acknowledged the terms and conditions of the plan) should enable the subsidiary to deduct such cost for tax purposes.

If the benefits from the plan are paid by the issuing company (usually a foreign parent company) and charged back to the local employer afterwards, the inclusion of such benefits in the employee’s compensation (subject to the payroll process of the respective period), the existence of supporting documentation signed by the employee (eg, annex where they acknowledged the terms and conditions of the plan) and intercompany agreements between local employer and the issuing company, should enable the subsidiary to deduct such cost for tax purposes.

Employee

Restricted stock and RSUs are taxed as salaries and wages income upon vesting.

Capital gains tax is imposed upon the gains recognized from the sale of shares.

Employer

Withholding & Reporting

Withholding and reporting are required on the vesting of restricted stock and RSUs.

Deduction

In principle, the restricted stock and RSU benefits, if reimbursed to the parent company for the cost of such benefits, should be a deductible expense for the subsidiary's income tax purposes. This would require the subsidiary to book such costs as employee compensation and to have properly settled the related personal income tax on behalf of the employees. However, exchange control approvals generally are required for such reimbursement arrangement.

Tax-favored

The income derived by a resident employee from the vesting of restricted stock and RSUs is not required to be included in the employee's comprehensive income for the relevant year, but can be treated as a separate year comprehensive income for tax purposes. This may effectively reduce the applicable tax rate and tax payable of the employee for the year.

The above preferential tax treatment is available before December 31, 2027, based on the current tax policies. If the PRC tax authorities do not extend the policy period, starting from January 1, 2028, the restricted stock and RSUs income derived by employees at vesting should be included in their gross salaries and wages for tax.

Employee

When the stock is granted

Granted stock to Colombian tax resident employees is taxed as labor income at a progressive rate, up to 39 percent. The taxable income must correspond to the fair market value (FMV) of the stocks.

If the Colombian company granting the stocks does not trade them in a public stock market, the FMV, unless proven otherwise, is presumed to be 130 percent of the intrinsic value of the Colombian entity. However, tax authorities are entitled to apply different valuation methods to determine the FMV (ie, present value of the future earnings or EBITDA multiples).

When the granted stock is sold

The sale of the granted stock by the Colombian tax resident employees would be taxable upon the difference between their cost basis (acquisition value taxed as labor income) and their sale price. If the shares qualify as a fixed asset of the employee, and have been held for more than 2 years, the profit would be deemed as a capital gain (taxed at 15 percent, instead of the progressive rates, up to 39 percent, applicable to ordinary income). The same rule applies if the non-tax resident employees sell the stock granted in a Colombian entity. If the stock is granted in a foreign entity holding, directly or indirectly, Colombian assets, the sale may trigger Colombian taxes under the Indirect Taxation Regime if certain conditions are met.

Exceptions may apply if the seller is a tax resident in a jurisdiction that has executed a tax treaty with Colombia or if the shares are publicly listed in the Colombian Stock Exchange.

Employer

When the stock is granted

Withholding & reporting

The Colombian entity (acting as the employer) must apply the labor withholding tax at progressive rates, up to 39 percent.  Such withholding must be reported before the tax authorities.

Deduction

The Colombian entity (acting as the employer) is allowed to deduct the FMV of the granted stock, provided that:

• The labor withholding tax is applied and
• Social security contributions are paid.

The abovementioned tax deduction can be recognized even if the Colombian entity is an affiliate of the entity issuing and granting the stock, if, under the Colombian accounting standards, the value of the granted stock is registered as an expense during any given year.

Note that the Tax Code provisions do not deal with the relationship between Colombian employers and the foreign affiliates that issue and grant the stock, which therefore must be dealt with according to standard, the transfer pricing regulations and the applicable law.

Reporting is required if the Colombian company registers the abovementioned tax deduction.

Employee

Restricted stock and RSUs are taxed upon the occurrence of a certain event, such as (a) the employee ceases to be employed, (b) the employer enters into liquidation, (c) the employer or employee ceases to be tax resident in the Czech Republic, (d) transfer of share (ie, restricted stocks or RSUs) or option, (e) exercise of option, (f) exchange of share (ie, restricted stocks or RSUs) at which the total nominal value of the employee's shares changes or (g) expiry of 10 years from the date of acquisition of the shares (ie, restricted stocks or RSUs) or option.

Upon the sale of shares, the gain is taxable except under certain circumstances.

Employer

Withholding & reporting

If the subsidiary deducts the cost of the benefits, withholding and reporting are required.

Deduction

A tax deduction is allowed if the subsidiary reimburses the parent company for the cost of the benefit.

Employee

As a starting point, restricted stock is taxed upon vesting. The taxable amount is taxed as salary income. If the value of the scheme is less than 10 percent of the employee’s remuneration (20 percent if the scheme is offered to 80 percent of staff members on equal terms and 50 percent in startup companies), the employer and the employee may opt for a qualified scheme with the effect that the spread is taxable under the rules applicable to capital gains. Consequently, the time of taxation of the employees is deferred until the time when such shares are sold by the employees. There is no taxation at the time of grant or vesting. Certain requirements to both the relevant securities and the award agreement apply to utilize the incentive tax scheme. A case-by-case analysis is recommended.

RSUs, which are not covered by the employee incentive schemes, are, as a starting point, taxable upon grant (eg, performance conditions, continued employment) However, it should be noted that a sole provision of continued employment, though not in all cases, can imply that the time of taxation of the employees is deferred.

Any gain from the sale of shares is subject to capital gains taxation.

Employer

Withholding & Reporting

Reporting is required. There are no withholding tax requirements.

Deduction

A local tax deduction is allowed if the subsidiary reimburses the parent company for the cost of the restricted stock or RSUs, and treasury shares are issued.

Employee

Restricted stock and RSUs are not contemplated in Ecuadorian law. Foreign restricted stock and RSUs should not be taxable in Ecuador.

In general, any gain obtained by Ecuadorian-based persons, national or foreign, is taxable; hence, the gain from the sale of shares is taxable.

Employer

Withholding & Reporting

As long as the employee does not pay anything for restricted stock or RSUs, no withholding is required.

Deduction

A local tax deduction may be allowed if the subsidiary reimburses the parent company for the cost of the benefit, provided the percentage requirements are met.

Employee

Restricted stock likely is taxed upon the release/waiver of such restriction(s) and thus, their grant.

RSUs likely are taxed upon vesting.

Proceeds from the sale of shares are taxable.

Employer

Withholding & Reporting

Withholding and reporting requirements generally apply.

Deduction

It is uncertain whether the subsidiary may claim a local tax deduction.

Employee

Restricted stock and RSUs are taxed as wages upon delivery and subject to progressive income tax up to approximately 56 percent.

The gain from the sale of shares is subject to tax as capital income at 30 percent up to EUR30,000 and 34 percent for the exceeding part. The loss from the sale of shares can be carried forward up to 5 years.

Employer

Withholding & Reporting

Withholding and reporting requirements apply.

Deduction

An employer may be able to claim a tax deduction for the cost of award benefits if it reimburses the parent company pursuant to a written agreement. As a minimum prerequisite, the cost must be an actual expense entered into bookkeeping.

This section covers favorable regimes applicable to qualifying plans.

Employee

For restricted stock and RSUs granted pursuant to a plan authorized as of 01/01/2018

The acquisition gain, which corresponds to the value of free shares on the date of their acquisition, is taxable on the year of the sale in accordance with the progressive scale of income tax (with a maximum rate of 45 percent), with a 50-percent rebate applicable to the part of the acquisition gain below EUR300,000 and is subject to a special 3- to 4-percent surtax on high income.

Capital gain deriving from the transfer of the shares, which corresponds to the difference between the transfer price and the value of the shares on the date of their acquisition, is subject to a 12.8-percent flat tax and a special 3- to 4-percent surtax on high income.

Employer

Withholding & Reporting

Reporting requirements apply. No withholding of income tax applies except in certain cases if the employee is a non-French tax resident.

Deduction

The costs incurred in connection with the implementation of the restricted stock or the RSU (eg, costs of repurchase of shares, share capital increase, formalities) are treated as a tax-deductible expense in France.

An employer may be able to claim a tax deduction for the cost of restricted stock and RSU benefits if it reimburses the parent company and the parent company uses treasury shares.

Employee

Restricted stock is generally taxed upon grant, provided economic power of disposal is obtained at such point in time. In case of uncertainty, as is often the case, strategies to prevent liability risks for the employer would generally include an application by the employer for a wage tax ruling.

RSUs are generally taxed upon vesting.

The sale of shares is subject to tax at a special capital gains tax rate.

Employer

Withholding & Reporting

Tax withholding and reporting requirements apply.

Deduction

Reimbursement of the parent company for the cost of the benefit pursuant to an advance written agreement should enable the subsidiary to deduct such cost from its income tax.

Restricted stock is not taxed upon grant or upon vesting.

Upon the sale of the shares, any benefit is subject to capital gains tax at a 15-percent flat rate.

In case of listed shares: the taxable benefit is equal to the value of the shares at vesting grant (ie, the closing trading value of the shares on the day of their vesting grant). Further, if the disposal value of the shares is higher than their value at vesting grant, then the positive difference is taxable, however it is exempt from capital gains tax, assuming the employee owns less than 0.5 percent of the share capital of the issuing company, for listed shares acquired after January 1, 2009.

In case of non-listed shares: the taxable benefit is the highest between the disposal value of the shares and the value of the shares at vesting grant (based on the net asset value of the shares for accounting purposes).

RSUs are not taxed upon grant, or upon vesting.

Upon the sale of the shares, any benefit is subject to capital gains tax at a 15-percent fixed rate.

In case of listed shares: the taxable benefit is equal to the value of the shares at vesting (ie, the closing trading value of the shares at the day of their vesting). Further, if the disposal value of the shares is higher than their value at vesting, then the positive difference is taxable, however it is exempt from capital gains tax, assuming the employee owns less than 0.5 percent of the share capital of the issuing company for listed shares acquired after January 1, 2009.

In case of non-listed shares: the taxable benefit is the highest between the disposal value of the shares and the value of the shares at vesting grant (based on the net asset value of the shares for accounting purposes).

Employer

Withholding & Reporting

If the subsidiary takes a local tax deduction for reimbursing the parent company for the cost of the restricted stock or RSU benefits, employer reporting is required.

The Employer is not required to withhold any tax, however, is required to report the vesting of the RSUs or the restricted stock through the monthly withholding tax return for informational purposes. Further, the Employer is required to provide its employees with a separate annual payroll certificate regarding the shares awarded.

Deduction

A local tax deduction is allowed if the subsidiary reimburses the parent company for the cost of the restricted stock and RSU benefits.

Employee

Restricted stock is taxed upon vesting.

RSUs are taxed upon vesting. If RSUs are not subject to vesting, then they will be taxed upon grant.

Restricted stock and RSUs are not subject to tax upon sale.

Employer

Withholding & Reporting

There are no withholding requirements. Restricted stock and RSU benefits must be reported annually with the employee's salary.

Deduction

Issuing of new shares to fulfill the restricted stock and RSU obligations are not deductible. Where the obligation is met by acquiring shares from the market, the costs are deductible when the vesting conditions have been satisfied. When the restricted stock and RSUs are discharged by recharge arrangement between group companies, provided that there is a written recharge agreement and that certain requirements are met, deduction maybe allowable. Note that where the shares are subsequently forfeited or cancelled, any deduction previously allowed should be written back as trading receipt and offered for assessment.

Employee

Restricted stock and RSUs are taxed upon vesting.

Proceeds from the acquisition of shares and the subsequent sale of shares are subject to tax.

Employer

Withholding & Reporting

Withholding and reporting requirements may apply if the subsidiary provides the benefits to the employees. Nonetheless, if the parent company provides the benefits, the subsidiary may opt for fulfilling withholding and reporting obligations.

Deduction

Reimbursement of the parent company for the cost of the benefits should enable the subsidiary to deduct such cost from its income taxes.

Tax-favored

Favorable tax treatment is available for restricted stock and RSUs if they are issued under an employee stock ownership plan. If the stock is issued via a special employee stock ownership plan organization, the taxation is even more favorable. The favorable tax treatment is subject to further conditions.

Employee

Restricted stock and RSUs are taxed upon allotment of shares. However, this amount must be determined in accordance with the fair market value of the shares as determined by a licensed Indian Merchant Banker.

Proceeds from the sale of shares are subject to tax. The shares being treated as capital assets, the sale would be subject to capital gains tax in the hands of the employee.

Employer

Withholding & Reporting

Withholding and reporting requirements apply.

Deduction

A deduction may be available if the Indian subsidiary reimburses the parent issuer for the costs of the award, but exchange control approval may be required, depending upon the structure of the arrangement.

Tax-favored

No tax-favored programs are available.

Employee

Restricted stock likely is taxed upon grant.

RSUs are taxed upon vesting.

Any gain from the sale is subject to capital gains tax.

Employer

Withholding & Reporting

Tax withholding and reporting generally are required if the subsidiary takes a local tax deduction for reimbursing the parent company, and the benefits from the restricted stock and RSUs are considered part of the base salary.

Deduction

Reimbursement of the parent company for the cost of the benefits in accordance with a written agreement should enable the subsidiary to deduct such cost from its income taxes.

Employee

RSUs are typically taxed upon vesting, unless the shares or cash pass to the employee at an earlier date.

The proceeds from the sale of the shares are taxable, although some exemptions (eg, the annual exemption of EUR1,270) may apply.

Employer

Withholding & Reporting

Withholding and reporting are required. The employer is required to operate Irish payroll taxes including income tax, universal social charge (USC) and employee’s social insurance contribution (PRSI). The employer is also required to report the grant, share-settlement or cash-settlement of RSUs by filing the Employer’s Share Awards return (Form ESA).

Deduction

If the subsidiary reimburses the parent company for the cost of the restricted stock or RSU benefits pursuant to a written agreement, it may be able to deduct such cost from its taxable income.

Employee

Tax treatment is determined by whether restricted stock or RSUs were granted under an approved plan via a trust arrangement in Israel.

• Restricted stock with no trustee: tax and social security are due at the time of grant.  The employee will also be taxed at the time of sale of the shares.

• Restricted stock under a trustee plan: the employee will be taxed at the time of sale of the shares. Part of the sale proceeds may be taxed as work-related income and part as capital gains based on the difference between the fair market value at the grant and the sale price, provided other conditions under this tax route are met. Social security is payable based on the work-related income portion.

• RSU with no trustee: tax and social security are due at the time of sale of the shares.
• RSU under a trustee plan: the employee will be taxed at the time of sale of the shares or when the shares are transferred from the trustee to the employee.  Part of the sale proceeds may be taxed as work-related income and part as capital gains, depending on the difference between the fair market value at grant and the sale price, provided other conditions under this tax route are met.  Social security is payable based on the work-related income portion.
• Exit taxes may also be imposed on the stock award values if the employee terminates residency in Israel.

Employer

Withholding & Reporting

Withholding and reporting are required.

Deduction

A tax deduction may be available for an approved trustee plan if a written recharge agreement is in place.

Tax-favored

Under Section 102 trustee plans, the taxable event is deferred until sale or until releasing the shares from the trustee. Under the capital gains route, restricted stock and RSUs must be held by a local trustee for at least the required holding period.

Employee

Restricted stock is taxed upon grant. Only the amount of the granted shares exceeding a certain threshold (ie, EUR2,065.83) is taxed as employment income, provided that restricted stock is generally granted to all employees and the shares are non-transferable for a 3-year period.

RSUs are taxed upon vesting and in the tax year in which the shares are granted. Only the amount of shares granted upon vesting (ie, the market value of the shares on vesting, less any price paid by participants) exceeding a certain threshold (ie, EUR2,065.83) are taxed, provided that RSUs are generally granted to all employees and the shares are non-transferable for a 3-year period.

Both restricted stocks and RSUs may not be taxed if they are granted as a form of productivity bonus, provided that the other law requirements are met.

Capital gains are subject to a substitute tax at a flat rate of 26 percent.

If the shares are issued by a tax haven company, the entire capital gain amount is subject to personal income tax (IRPEF) at the applicable progressive rates between 23 percent and 43 percent plus regional and municipal surtaxes, if applicable. In order to be qualified as a tax haven resident, as a general rule, the issuing company ( ie, the company whose shares the employee receives) must be subject to an actual tax rate lower than 50 percent of the applicable rate in Italy (ie, lower than 13.95 percent).

A special step-up rule may be annually introduced, lowering capital gain taxation.

Employer

Withholding & reporting

Withholding and reporting are required.

Deduction

If the parent company is reimbursed by the subsidiary for the cost of the benefits, the subsidiary should be able to deduct such costs from its income taxes.

Employee

Restricted stock is taxed upon the restriction cancellation date, so long as certain factual conditions are satisfied. For example, one of the conditions is that the stock granted in exchange of an employee's monetary claim is returned to the Japanese subsidiary if the employee or the company's performance fails to meet certain requirements or the employee fails to continue to work for certain required period.

RSUs are taxed when vesting of RSUs is fixed, depending on the details of the RSUs.

Employer

Withholding & reporting

Withholding is applicable depending on how equity compensations are granted between the foreign parent company and its Japanese subsidiary.

Deduction

A deduction is permitted within the fiscal year to which the restriction cancellation date belongs. A deduction may be permitted for restricted stock if certain conditions are met such as notification to the tax authorities. The scope of deduction has been expanded by the amendment promulgated in 2017, and it includes RSUs.

Employee

Restricted stock and RSU are taxable perquisites and are taxed at the point of vesting. The taxable value of RSU / restricted stock is the market value of the shares on the date of vesting less the amount paid for the shares (if any). Any gain made from the subsequent disposal of these shares by individuals is not taxable as the recent introduction of the capital gains tax regime in Malaysia only applies to the disposal of unlisted shares by companies, limited liability partnerships, cooperatives, and trust bodies.

Employer

Withholding & Reporting

Notification to the tax authorities is required. Withholding via an employee’s Monthly Tax Deduction is required unless the employee has elected in writing to the employer to remit the tax upon submission of his or her tax return for the relevant year.

Deduction

Despite public rulings issued by the Malaysian tax authorities stating that if the shares acquired by the employee are newly issued shares, the local subsidiary will not be entitled to claim a deduction for any costs incurred in relation to such new shares, the Malaysian Court of Appeal’s recent decision states in the contrary. It is now trite law following the recent Court’s decision that employers are allowed to claim a deduction on the costs incurred in relation to the issuance of share scheme provided that the primary purpose of the share scheme is an integral part of the employment package to incentivize the employee to generate income.

Employee

Restricted stock and RSUs are taxed upon vesting.

The gain upon the sale of the shares is taxable.

Employer

Withholding & Reporting

Tax withholding and reporting are generally not required unless the Mexican subsidiary reimburses the parent company for the cost of the restricted stock or RSU benefits.

Deduction

A local tax deduction generally is allowed if the subsidiary reimburses the parent company for the cost of the restricted stock and RSU benefits under a written agreement. However, reimbursement may trigger withholding and reporting requirements for the subsidiary.

Deduction is possible but only for stock’s awards granted to managers; statutory auditors; directors; general managers; or members of the board of directors, statutory auditing committee or advisory, or any other body (ie, management employees). Deductions in Mexico should have a business reason, described under Mexican Income Tax Law as “strictly indispensability.”

Employee

Restricted stock is taxed upon the granting of the stock (or cash settlement) as income from employment at the progressive income tax rate up to 49.5 percent.

RSUs are taxed upon the delivery of shares (which is generally upon vesting) as income from employment at the progressive tax rate up to 49.5 percent.

Generally, there is no tax upon the sale of shares if the shareholder, together with their fiscal partner, has an interest less than 5 percent in the nominal subscribed share capital (determined per class of shares). However, an annual tax on deemed return on investment may apply.

Employer

Withholding & Reporting

Withholding and reporting requirements apply.

Deduction

A local tax deduction is not allowed.

Employee

• The benefit to the employee is income. The benefit of restricted stock/RSUs is generally the difference between what the employee pays and the market value of the shares at the taxing date. The taxing date is when an employee holds the shares like any other shareholder (eg, there is no material risk that the employee will lose the shares and there is no downside protection)
• From April 1, 2017, an employer is required to report the value of the benefit at the taxing date through payroll reporting
• Whether tax on the benefit is returned by the employee or the employer will be fact-dependent, although the primary obligation remains with the employee
• The tax implications of holding the shares and selling the shares after the taxing date will be fact-dependent, although New Zealand does not have a general capital gains tax, applications of holding the stock and of selling it will be fact-dependent

Employer

Withholding & reporting

• From April 1, 2017 an employer is required to report the value of the benefit at the taxing date through payroll reporting
• Whether tax on the benefit is returned by the employee or the employer will be fact-dependent, although the primary obligation remains with the employee

Deduction

A New Zealand employer will generally be entitled to a corporate income tax deduction for restricted share awards by reference to the amount on which the employee is taxed and the deduction arises at the time the employee is taxed.

Employee

The employee is taxed on restricted stock upon grant and on RSUs upon vesting provided that the conditions of the vesting are fulfilled and some benefit or income is received by the employee. Such accrued income is taxable, and rules relating to the personal income tax of employees shall apply. Additionally, where the employee chooses to dispose the restricted stock or RSU after the vesting period is completed and accrues gains from the disposal of the restricted stock or RSU in Nigeria, such gains will be subject to capital gains tax at the rate of 10 percent where proceeds of the disposal in aggregate is worth NGN100 million and above within any 12 consecutive months.

Employer

Withholding & Reporting

Upon grant for restricted stock and upon vesting of RSUs, the restricted stock and RSU are treated as a form of compensation to the employee, as such the employer shall deduct personal income tax for remittance to the taxing authority.

Any dividend paid to an employee as a shareholder is liable to withholding tax at 10 percent. Every employer is required to file, alongside their annual return, a schedule showing the information on its employees share option.

Deduction

The employer is required to deduct income tax on the vesting date for an RSU and remit to the relevant tax authority. The obligation to deduct tax arises on the vesting date or the effective date of payment for phantom shares. The share price for a public limited liability company is the value for which the shares are traded on the stock market at the date of the exercise. For non-listed companies, the price per share is the net assets of the company issuing the shares divided by the number of shares. The taxable benefit for a phantom share is the cash payment made to the employee.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain upon the sale of shares is taxed. The shares also may be subject to annual wealth tax.

Employer

Withholding & Reporting

Withholding and reporting are required.

Deduction

Reimbursement made to the parent company for the cost of the benefits, pursuant to a written agreement, should enable the subsidiary to deduct such cost from its taxable income.

Employee

Restricted stock is likely taxed upon vesting.

RSUs are generally taxed upon vesting.

If the Philippine subsidiary reimburses the parent company for the cost of the award benefit, it is required to pay a fringe benefit tax on any such benefits received by non-rank-and-file employees of the Philippine subsidiary.

The gain upon the sale of shares is taxed.

Employer

Withholding & reporting

Withholding and reporting by the Philippine subsidiary are generally not required, unless the Philippine subsidiary reimburses the parent company for the cost of the benefit.

Deduction

A Philippine subsidiary's reimbursement to the parent company for the cost of the benefits, pursuant to a written agreement and in compliance with withholding requirements, will probably enable the subsidiary to deduct such cost from its income taxes.

Employee

Restricted stock is not taxed upon grant, provided  specific conditions are met.

RSUs are not taxed upon vesting, provided specific conditions are met.

The gain from the sale of shares is taxed.

Employer

Withholding & reporting

Withholding and reporting may be required, if the subsidiary reimburses the parent company for the cost of the restricted stock and RSU benefits, and thus the benefits are deemed part of the local employment relationship.

Deduction

The subsidiary should be able to deduct the cost of the benefits from its taxable income if such benefit is deemed to be part of an employee's remuneration and the subsidiary reimburses the company for such remuneration.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain from the sale of shares is taxed.

Portugal implemented a new tax regime that may exempt 50 percent of taxable gains arising from employer incentive plans. To the extent that certain conditions are met, the effective tax rate can be 14 percent (eg, the employer is a qualifying entity and the grantee keeps the underlying securities for at least 1 year). It is also possible to defer the tax due from the time of grant or vesting to the time of sale of underlying shares under the new tax regime. 

Employer

Withholding & reporting

Tax withholding is not required. However, the employer can withhold tax upon the employee's request.

Reporting requirements may apply.

Deduction

Reimbursement of the parent company by the subsidiary for the cost of the benefits should enable the subsidiary to deduct such cost.

Employee

On the condition that restricted stock and RSUs qualify as shares (securities) or "termed finance instruments" (as defined under the Russian law), they are taxed upon vesting.

Tax is imposed from the sale of shares.

Employer

Withholding & reporting

Employers generally must comply with reporting and withholding requirements on any income paid to Russian taxpayers.

Deduction

Generally, the subsidiary will not be able to deduct the cost of the benefits from its taxable income.

Employee

There is no tax imposed on restricted stock and RSU benefits.

Employer

Withholding & reporting

Withholding and reporting are not required.

Deduction

A subsidiary typically is unable to deduct the cost of the benefits from its income taxes.

Employee

Restricted stock and RSUs are generally taxed upon vesting. For restricted stock subject to the restriction on sale, the taxing point can be deferred to the time when the restriction ceases to apply. The taxable value is the market value at the time of the taxing point.

No tax is imposed upon the sale of shares if the gain is considered capital gain.

Employer

Withholding & reporting

Generally, tax withholding is not required. The employer is required to report income received by an employee from restricted stock and RSUs. If the employee ceases employment in Singapore, the Singapore employer is required to report any RSUs granted during the Singapore employment which remain unvested and withholds any monies due to the employee once the employer knows the employee will cease Singapore employment. Such RSUs will be subject to tax on the market value, determined 1 month before the date of termination of employment (“deemed gain”). If the RSUs are forfeited, there is no deemed gain to be reported. The deemed gain applies to employees who are on employment passes or Singapore permanent residents who expect to leave Singapore for more than 3 months. The employer will remit the monies withheld to the Inland Revenue Authority of Singapore (IRAS) when the employee’s tax matters are finalized. Any balance will then be released to the employee. If the actual gain is less, the employee can submit documentation to show the actual gain and claim a tax refund for the difference. The employee can do so within 4 years from the relevant year of assessment.

Deduction

The subsidiary should be able to deduct the cost of the benefit from its taxable income if:

• Treasury shares are used

• The parent company incurs the costs of acquiring the treasury shares [A] and recharges the amount to the subsidiary [B] and

• The deduction claimed by subsidiary is the lower of [A] or [B] less any amount received from the employees.

Employee

Restricted stock and RSUs are taxed at vesting, as taxable benefit in kind provided by the employer.

Exempted from tax shall be employee shares in their nominal value if:

• Employee receives shares of his/her employer (no other entity);
• Such employer never paid out any dividends within the period from the employer´s first corporate income tax registration until the end of tax period during which the employer acquires the shares; and
• Such shares were not and are not traded on a regulated market in Slovakia or abroad until the end of the tax period during which the employer acquires the shares.

Under the Income Tax Act No. 595/2003 Coll. as later amended, upon the sale of shares, tax is generally imposed on the gain.

The following income shall be exempt from tax:

• Income from the sale or transfer of securities accepted for trading in a regulated market or in a similar foreign-regulated market where the period between the acquisition and the sale thereof is more than 1 year (excluding employee shares acquired from the employer when the acquisition was exempted from tax) .
• Income from sale or transfer of securities up to the aggregate value of EUR500.

The income from the sale of securities that were included in the taxpayer’s business assets is not tax-exempt.

Employer

Withholding & Reporting

Withholding and reporting generally are required.

Deduction

A Slovak subsidiary's reimbursement made to the parent company for the cost of the benefits, pursuant to a written agreement, should enable the subsidiary to deduct such cost from its taxable income.

Employee

Restricted stock and RSUs are likely taxed upon vesting.

The gain on the sale of shares is generally taxed.

Employer

Withholding & Reporting

Withholding and reporting are required.

Deduction

If the subsidiary reimburses the parent company for the cost of offering the awards,  a tax deduction could be available.

Employee

Restricted stock is taxed upon the date when it is delivered to the employee's account as salary income.

RSUs are taxed upon the date of payment.

The capital gain from the sale of the shares is generally taxable (capital gains of KRW2.5 million or less annually are tax-exempt).

Employer

Withholding & Reporting

Unless the parent company is reimbursed by the subsidiary for the cost of restricted stock and RSU benefits, withholding and reporting generally are not required.

Deduction

If the subsidiary reimburses the parent company for the cost of offering the restricted stock or RSUs, and other conditions are satisfied, including exchange control approval for such reimbursement, a tax deduction is available.

Employee

Restricted stock is generally taxed at grant. A EUR12,000-per-year exemption may be applicable if the relevant conditions are met. Dividends received by the employee are taxable.

RSUs are taxed upon vesting. The same EUR12,000-per-year exemption and an additional 30-percent reduction may be applicable if the relevant conditions are met.

The gain from the sale of the shares is taxable.

Employer

Withholding & Reporting

Generally, withholding requirements apply.

Deduction

Even if the offering to the employee is made by the parent entity, a deductible expense arises for the Spanish employer entity.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain upon the sale of the shares is taxable.

Employer

Withholding & Reporting

Withholding and reporting are required.

Deduction

Reimbursement of the parent company by the subsidiary for the cost of the benefits should enable the subsidiary to deduct such cost from its income taxes.

Employee

Restricted stock is likely taxed upon grant.

RSUs are taxed upon vesting (ie, the remittance of the shares).

There is generally no capital gains income tax on the sale of shares, but wealth tax may apply.

Employer

Withholding & reporting

The employer must withhold and report for employees with B permits or for employees who exported their RSUs (ie, have a foreign domicile at the taxable event).

Reporting is required on an annual salary statement for employees with C permits and residents.

Deduction

Reimbursement of the parent company by the subsidiary for the cost of the benefits, pursuant to a written agreement, should enable the subsidiary to deduct such cost from its income taxes.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain upon the sale of the shares is not taxable but is included in alternative minimum tax (AMT) calculations. If the stock is sold at a lower price, such capital loss can be included in these calculations.

Employer

Withholding & Reporting

Reporting is generally required.

Deduction

Reimbursement of the parent company by the subsidiary for the cost of the benefits, pursuant to a written agreement, should enable the subsidiary to deduct such cost from its income taxes.

Employee

Restricted stock is taxed at grant.

RSUs are taxed at vesting.

The gain from the sale of the shares is taxable if repatriated by a Thai tax resident.

Employer

Withholding & Reporting

Unless the subsidiary reimburses the parent company for the cost of the plan benefits, withholding and reporting generally are not required.

Deduction

Tax deduction is likely available, if the Thai subsidiary reimburses the parent company for costs of the award, and certain other requirements are met.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain from the sale of shares is taxable.

Employer

Withholding & Reporting

Withholding and reporting requirements apply.

Deduction

It is unclear whether the subsidiary can take a deduction for the cost of either type of award, even if it reimburses the parent company.

Employee

Granting of restricted stock and RSUs to Ukrainian individuals should not trigger immediate Ukrainian tax implications for a respective individual as such individual does not immediately obtain ownership to shares.

Ukrainian tax authorities may argue that a Ukrainian individual should reflect taxable income upon the receipt of restricted stock and RSUs as the granting of the restricted stock and RSUs already has an intrinsic fringe benefit.

Conversion of restricted stock and RSUs into shares will be treated as a taxable event for a Ukrainian individual if the value of shares granted are below the market value (the risk of such treatment is medium to high if the shares are listed) or are granted for free. Respective amounts will be considered foreign income of such individual and subject to taxation. If shares are purchased at fair market value, no income arises and hence no tax is due.

Income in the form of dividends from foreign companies will be subject to tax at preferential rates.

Upon sale of shares, gain between the sale price and expenses incurred on the acquisition of the shares should be taxable.

Reporting and tax payment liabilities rest upon Ukrainian individuals.

Employer

Withholding & Reporting

No tax withholding and reporting requirements apply given the issuing company is a nonresident entity. Potentially, a Ukrainian subsidiary of the issuing company may bear withholding and reporting liabilities as a tax agent of a Ukrainian individual due to certain ambiguities in the legislation.

Deduction

Given that Ukrainian legislation contains no concept of stock-related incentives, a non-Ukrainian issuer rather than a local entity will provide awards to employees.  Hence, all costs will be borne by the non-Ukrainian issuer and no question of deduction will arise.

Employee

Restricted stock is taxed upon vesting, provided the vesting period is 5 years or shorter, subject to an election to be taxed at acquisition.

Restricted stock is taxed upon grant if it will not vest within 5 years.

RSUs are generally taxed on delivery of shares upon vesting.

The gain from the sale of the shares is taxable, subject to an annual exempt amount.

Employer

Withholding & reporting

Withholding is required if shares are "readily convertible assets."

Registration and annual reporting are required.

Deduction

A local tax deduction may generally be allowed.

Employee

Restricted stock is taxed upon grant.

RSUs are taxed upon vesting.

The gain from the sale of the shares is taxable.

Employer

Withholding & Reporting

Withholding and reporting requirements do not apply.

Deduction

The ability to purchase foreign currency, though substantially improved, imposes certain challenges for the reimbursement of the parent company.

Employee

Restricted stock is likely taxed upon grant.

RSUs are likely taxed upon vesting.

Tax is generally imposed on gains upon sale of shares.

Employer

Withholding & Reporting

Implementing entities (as employers) are generally required to withhold and report.

Deduction

Because of the foreign exchange restriction, reimbursement made to the parent company are not likely to be available.