A recent tax update brought about much-anticipated changes in the taxation of employee options and RSUs. The Greek Tech Finance Network hosted Elina Filippou and Irene Tsiosta from Zepos & Yannopoulos who took a deep dive into this tax update and the use of employee options and RSUs in general.
4. Key terms
Stock Options
Listed/Non-listed shares
Share Awards
Startups
1. Small companies with net asset value < €4.000.000, net turnover <€8.000.000 and average
number of 50 employees
2. Very small companies with net asset value < €350.000, net turnover <€700.000 and average
number of 10 employees
3. No registration requirement in the Startup Database of Elevate Greece
5. Is it an option or a share?
5
Stock Options
Options offered at a zero or
discounted price for the
purchase of shares
Share Awards
• RSUs
• Restricted Stock
• Performance Shares
• Performance Units
• Matching Shares
7. Tax efficiency is back
7
Old regime
up to 44%
salary tax on benefit upon
exercise/vesting
New regime
(under conditions)
5%
capital gains tax for
Startups; only for
stock options
15%
capital gains tax
8. Stock Options | 3 milestones for taxation
Stock Options
2-year + holding period
Option grant date
The 2-year (or 3-year, for
Startups) minimum holding
period starts counting
Option exercise date
The taxable benefit is now
generated although
taxation is deferred
Share transfer date
The taxable benefit,
classified as capital gains,
is now subject to 15%
income tax or 5% for
Startups*
*5% rate for options granted
within first 5 years of Startup operation
9. Share Awards | 2 milestones for taxation
Share awards
No minimum holding period
requirement
Award grant date
No taxable event
Acquisition of shares
The taxable benefit is now
generated, although
taxation is deferred
Share transfer date
The taxable benefit,
classified as capital gains, is
now subject to 15% income
tax
10. Defining the benefit for non listed shares
Net Asset Value
Sale price
Exercise of options
Acquisition of shares
Share transfer
12. Example #1 Stock options for non-listed shares
Sale price
Euro 5
Exercise price
Euro 2
Share transfer date
Option grant date Option exercise date
Euro 2 x 15%
capital gains tax
[Art. 42A]
Jan
2021
Taxable
event
Share value*
Euro 4
*Based on company’s net asset value
Euro 1 x 15%
capital gains tax
[Art. 42]
&
Jan
2022
May
2023
Taxable benefit
(per share) =
Euro 2
(Euro 4 share value
minus Euro 2
exercise price)
Taxable benefit
(per share) =
Euro 1
(Euro 5 sale price minus Euro 4
share value at the date of exercise
of options/acquisition of shares)
13. Example #2 Stock options for Startup shares
Sale price
Euro 5
Exercise price
Euro 2
Share transfer date
Option grant date Option exercise date
Euro 2 x 5%
capital gains tax
[Art. 42A]
Share value*
Euro 4
*Based on company’s net asset value
Euro 1 x 15%
capital gains tax
[Art. 42]
&
Taxable benefit
(per share) =
Euro 2
(Euro 4 share value
minus Euro 2
exercise price)
Taxable benefit
(per share) =
Euro 1
(Euro 5 sale price minus Euro 4
share value at the date of exercise
of options/acquisition of shares)
Jan
2021
Taxable
event
Jan
2022
May
2024
14. Example #3 Share awards (non-listed incl Startups)
Sale price
Euro 5
Share transfer date
Award grant date Acquisition of shares
Share value*
Euro 4
*Based on company’s net asset value
Euro 5 x 15%
capital gains tax
[Art. 42A]
Taxable benefit
(per share) =
Euro 5
(Euro 5 sale price of shares)
Jan
2021
Taxable
event
Jan
2022
Feb
2022
16. Tax compliance for employer
Grant date of
option / award
Option exercise date /
acquisition of shares
• Salary certificate
(reference to the taxable benefit, the
grant date and the amount of shares)
• Withholding tax return
(filed on a monthly basis for reporting
purposes)
Share
transfer date
17. Tax compliance for employee
Grant date of
option / award
Option exercise date /
acquisition of shares
Income tax return
of the fiscal year following the
transfer of the shares
Share
transfer date
18. New rules apply from 01.01.2020
01.01.2020
• Shares vesting after 1.1.2020
• Options exercised after 1.1.2020
• Applicable for current, future and past
employment relationships
19. Eligible issuing companies
Stock option plans
• Greek non-listed companies including startups
• Greek companies under the form of “IKE” are
not eligible
• Parent companies with Greek subsidiary
companies in Greece
• Affiliated companies
Share award plans
• Greek non-listed companies including startups
• Parent companies with Greek subsidiary
companies in Greece
• Affiliated companies
