Tax at grant for RS. Generally, tax at vesting for RSU. Taxable amount is fair market value of the shares on the tax event; no deduction available. If RSUs are settled in cash or can be settled in cash or shares, depending on other terms of the RSUs, salary deferral arrangement rules may apply, resulting in tax at grant.
Tax on sale. Taxable amount is one half of any capital gain.
Unavailable for stock-settled awards unless the company satisfies a number of specific requirements including retaining the discretion to settle in either cash or shares and the subsidiary reimburses the parent.
However, if the company has the ability to settle in cash, it may implicate salary deferral arrangement rules and the awards may be taxed at grant.
Income Tax:
Yes.
Social Insurance Contribution:
Yes, but subject to annual contribution ceiling. If applicable, employer has to pay employer contributions and withhold employee's contributions.
Provincial payroll taxes levied on employers may be payable on award income.
Provincial laws apply. In all provinces, most plans will be exempt from prospectus/dealer registration requirements.
Discretionary relief may be required in certain instances depending on specific plan terms.
Generally not, provided employee signs agreement acknowledging discretionary nature of the plan.
According to recent case law, employees may be entitled to vest in awards through notice period, even if there is language in award agreement to the contrary.
As of 1 June 2022, award documents must be provided to employees in Quebec in French.
Please contact Baker McKenzie for details.