Generally, tax on discount at purchase.
Tax qualification available for certain share scheme (e.g., SAYE) which defers income tax until sale, provided certain conditions are met. However, employee social insurance contributions are due on any benefit realized at purchase under such a scheme.
Tax on sale, subject to annual exclusion.
Generally allowed, if subsidiary reimburses parent under a written agreement and certain conditions are met.
Income Tax:
Withholding and reporting through PAYE system is required for ESPP income recognized on or after January 1, 2024.
Additionally, annual reporting of grant and purchase required for ESPP.
Reporting must be completed electronically.
Social Insurance Contributions:
Universal Social Charges ("USC") are due on all equity award income.
Employee social insurance contributions (PRSI charges) are due on all equity award income.
Employer is required to withhold PRSI or USC on ESPP income recognized on or after 1 January 2024.
Employer PRSI does not apply.
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.
Generally, no, but employee should be required to sign/accept an agreement acknowledging the discretionary nature of the grant.
Part-time employees likely entitled to pro rata benefits.
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.