Zdanění akciových a opčních plánů opět na scéně s překvapivým vývojem

Taxation of stock and option plans back on the scene with a surprising development

As we informed you HERE, an amendment has been introduced (again) changing the rules for the taxation of employee stock and option plans. This proposal allows companies to revert to the original rules, which are more common in the international context.

The proposal did not come up for third reading in the Chamber of Deputies until just before the Christmas holidays and, rather surprisingly, made one major change from the original text.

The basic concept, i.e. the possibility only to postpone taxation, will be valid if approved by the Senate and the President, under the conditions we described in the previous alert.

However, during the deliberations, the transitional provision to the time of "taxing" income for situations that have already occurred where the employer will not use the deferral option (e.g., the provision of shares in 2024) was significantly changed. Now, the income will be deemed to be earned in the second calendar month after the effective date of the Act. According to the current regulation, the deferral of taxation was automatic and therefore taxation could not occur in 2024. This means that e.g. the allocation of free shares by the employer in January 2024 will be taxed as income in the employee's wages sometime in March/April 2025 (depending on the speed of the rest of the legislative process), unless the company decides to use the option of the deferral of taxation.

This is quite a significant change both from the original proposal and from the promise to the companies concerned that they will be able to use the previous rules still in 2024. The expert community is currently discussing any possible adjustments so that income provided in 2024 can be taxed in 2024. Otherwise, the international double taxation avoidance will be an adventure with an unpredictable ending for the employees themselves.

Companies providing benefits to their employees under share and option plans must therefore be flexible in preparing for the relevant changes and consider the best possible solution in their particular circumstances.

For more detailed information, please contact the authors of this article or the EY team with whom you are working.

Authors:

Michaela Felcmanová

Adam Linek