Generally, yes, provided subsidiary bears the cost of award (whether by paying the award directly to the employee or by reimbursing parent pursuant to a written agreement if parent makes payment).
Income Tax:
Yes, withholding and reporting required.
Social Insurance Contributions:
Yes, employee and employer contributions due at taxable event (uncapped).
Employer must withhold the employee's social insurance contribution.
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 in termination indemnities, obligation to consult works council, etc. If awards are granted as a regular, annual basis, there is a risk they will be treated as vested rights.
Discrimination against union or part-time employees is 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.