Tax on discount at purchase.

Tax-favored stock purchase plan (P.E.E.) may be considered.

Tax on sale.

Currently, a deduction is generally allowed only with respect to shares that the parent has repurchased, not newly issued shares, and only with respect to the actual cost incurred; a written agreement is 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).

Employee must withhold the employee contributions.

The EU Prospectus Regulation is in effect in all European Economic Area countries, which includes all EU member states, Iceland, Liechtenstein and Norway ("EEA"). ESPP purchase rights are considered a public offering of securities for purposes of the EU Prospectus Regulation.

An EU-compliant prospectus will be required for the offer of an ESPP in any EEA member state, unless an exemption or exclusion applies. A "small offering exemption" is available if the offer is made to less than 150 persons in a member state. An "employee share scheme exemption" is available if the offer is made to existing or former employees (or directors), provided the offerees are provided with a short disclosure document that contains certain prescribed information about the offer. An exclusion for offers under a certain value threshold across the EEA may also be available.

Additional requirements may apply if relying on certain exemptions/exclusions or if a prospectus must be filed. 

Please contact Baker McKenzie for more information.

Minor reporting requirements may apply.

Possibly. Disclaimer is strongly recommended and employees should consent (in French) to payroll deductions.

Increased entitlement risk if grants are regularly made under similar terms over several years.

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 on 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.