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26.01.2021
Stock Options & Share Awards
Tax efficiency returned
Contents
2
Back to the basics
1.
Tax treatment revamped | overview
2.
A few examples
3.
Implementing in practice
4.
Questions
5.
Back to the basics
1.
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
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
Tax treatment revamped
Overview
2.
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
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
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
Defining the benefit for non listed shares
Net Asset Value
Sale price
Exercise of options
Acquisition of shares
Share transfer
A few examples
3.
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)
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
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
Implementing in practice
4.
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
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
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
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
Any questions?
20
Contact us
Elina Filippou
Tax Partner
e.filippou@zeya.com
Irene Tsiosta
Tax Associate
e.tsiosta@zeya.com
21
www.zeya.com
Thank you

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Employee options vs. rs us greek tax framework

  • 1. 26.01.2021 Stock Options & Share Awards Tax efficiency returned
  • 2. Contents 2 Back to the basics 1. Tax treatment revamped | overview 2. A few examples 3. Implementing in practice 4. Questions 5.
  • 3. Back to the basics 1.
  • 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
  • 21. Contact us Elina Filippou Tax Partner e.filippou@zeya.com Irene Tsiosta Tax Associate e.tsiosta@zeya.com 21