Tax on spread at exercise.

Tax qualification may be available for option grants, resulting in deferral of tax due at exercise until sale for employees as well as elimination of certain employee and employer social security contributions if requirements met. However, there is an employer-paid social tax due at grant of qualified options. A sub-plan must be in place at the time of grant, which imposes certain other restrictions such as special closed period which preclude public companies from granting qualified options during certain periods. In addition, special reporting requirements apply to qualified options. 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

For non-qualified options, 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.

For qualified options, reporting required, but income tax withholding is generally not required, except in the case of outbound transfers.

Social Insurance Contributions

Yes (at rates up to approximately 46% for the employer and approximately 23% for the employee) for non-qualified options.

Employer must withhold the employee contributions for non-qualified options.

Employer social tax applies at grant of qualified options.

Employee social tax on qualified options applies at sale, but employer is not required to withhold.

No securities law restrictions or obligations apply.

Non-transferable stock options are not considered a public offering of securities for purposes of the EU Prospectus Regulation.

Minor reporting requirements may apply.

Possibly. Disclaimer is strongly recommended.

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.