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GPS: Global Stock Plans

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In recent years, companies have been expanding their equity compensation plans to non-U.S. locations. This publication addresses the key concepts and challenges associated with awarding equity compensation to non-U.S. employees of U.S.-headquartered, publicly traded companies. While such use of equity compensation can be an effective way to bolster employee retention and equalize U.S. and non-U.S. employees, the use of equity compensation in multiple jurisdictions presents administrative challenges and compliance risks for stock plan professionals. This publication, produced by the Certified Equity Professional Institute (CEPI) at Santa Clara University and distributed by the NCEO, is part of the CEPI's GPS (Guidance, Procedures, Systems) series. It gives stock plan professionals much-needed guidance about fundamentals and processes when using equity in non-U.S. locations.

Publication Details

Format: Perfect-bound book, 61 pages
Dimensions: 8.5 x 11 inches
Edition: 1st (November 2009)
Status: In stock

Contents

Introduction
Design of Plans
Legal Issues
Grant Process
Transactions
Tax and Payroll Issues
Accounting
Other Issues
Next Steps
Appendices

Excerpts

6.1. Tax and Payroll Issues Overview

6.1.1. Equity awards are considered compensatory and, therefore, taxable in virtually all countries. The type of tax payable, amount subject to tax, timing of the taxable event, tax withholding requirements, tax rates, and the requirement to report the income to the tax authorities vary by country. Some countries require withholding and reporting. Others require reporting, but not withholding. A few require no withholding or reporting.

6.1.2. Countries use different tax years. Reporting the taxable event is typically done on a tax year basis rather than a company's fiscal year. In most cases the tax year is the calendar year (e.g., US) and reporting is straightforward. Other countries use different tax years, such as a tax
year beginning on April 1 and ending on March 31. In these situations, reporting may be more challenging.