Taxed at payment.
Taxable amount is the amount of the cash payment.
Generally, yes, provided subsidiary bears the cost of award. Written agreement strongly recommended.
Income Tax
Employer is required to withhold income tax and report taxable amount. Legal restrictions limit employer's ability to transfer individual tax rates to third parties.
Social Insurance Contributions
Yes (at rates up to approximately 46% for the employer and approximately 23% for the employee).
Employer must withhold the employee contributions.
Awards paid in cash through local payroll generally have increased plan entitlement risks, as well as other increased labor law risks such as the need to include amount when calculating termination indemnities, obligation to consult works council, etc.
Cash awards may be viewed as a remuneration item (and, as such, an addendum to the employment contract), which may require that the award agreement be translated into French and which may require consultation with works council (if applicable).
Discrimination against part-time employees is generally prohibited.
The EU Council Directive 2000/78/EC prohibits age discrimination. Most, if not all, countries have adopted local rules implementing this Directive, which may have an impact on design of equity and other incentive plans in the EU, particularly provisions with age or age and service provisions which give different treatment (e.g., accelerated or continued vesting) for those meeting the criteria
A valid basis is required to collect, process and transfer personal data.
The EU Data Protection Regulation ("GDPR") became effective in all EU/EEA countries on 25 May 2018. It introduces new requirements and increases the powers of data protection authorities, rights of data subjects and potential penalties for non-compliance. Accordingly, companies should review their approach to data privacy compliance in the context of equity plan administration and consider on which basis they may be able to rely to collect, process and transfer data.
Registration and notification requirements with local data privacy authorities may also apply.