Tax at grant for RS; tax at vesting for RSU. Taxable amount is fair market value of the shares on the tax event.
Annual exemption may apply to first EUR 2,065 of taxable amount if shares held three years from date of grant (RS) or vesting (RSU) and certain other requirements are met.
Tax on sale. A Foreign Financial Asset Tax may be assessed on the value of shares held outside of Italy.
Under Italian tax law, the fair market value of the shares is calculated based on the one-month average price prior to the date of determination.
Allowed if subsidiary reimburses parent under a written agreement. The deduction may be limited to accounting expense of award based upon OECD guidelines and commentary on transfer pricing and may increase labor risks.
Income Tax:
Withholding and reporting required, unless income is exempt from tax (based on EUR 2,065 exemption).
Social Insurance Contributions:
Employee and employer social insurance contributions apply (to the extent applicable wage ceiling not already met), unless (1) EUR 2,065 exemption applies to income or (2) RS/RSU not granted to generality of employees and are subject to vesting conditions. If applicable, employer must withhold employee's contributions.
Financial intermediary requirement does not apply to RS/RSUs.
No securities law restrictions or obligations apply.
Non-transferable free offers of RS/RSUs are not considered a public offering of securities for purposes of the EU Prospectus Regulation.
Possible entitlement issues.
Although the risks may be reduced if employees acknowledge discretionary nature of plan and that award income is excluded from salary, a Milan labor court has ruled that income from a stock option exercise is employment compensation.
Employees should also expressly agree to accept certain non-negotiated terms of the award.
Discrimination against part-time employees is generally prohibited.
The EU Council Directive 2000/78/EC prohibits age discrimination. Most, if not all, countries (including Italy) 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.