ESOP Taxation across Europe

Country Primary Scheme Tax Impact at Grant/Exercise Holding Period for Tax Benefits Tax Rate at Sale Conditions for Early Exercise Company Size/Issue Limits Additional Schemes Eligibility Criteria for Individuals
Austria Deferred tax at sale if company <10 years old; 75% taxed at 27.5%, 25%
as income. No tax at exercise for qualifying cos 3 years holding 27.5% for 75% of proceeds 25% taxed as income Companies <10 years, < EUR40M turnover, <100 employees None Limited to employees of qualifying startups and SMEs, generally excluding board members.
Belgium Taxed at 18% at grant if accepted within 60 days; no additional tax on
gains if shares held 2 years post-exercise. 18% tax at grant 2 years post-exercise Not available Higher rate if not accepted within 60 days Not available Proposed amendments to defer taxable events to sale, but currently no
formal additional schemes beyond 18% tax option at grant. Available to employees; stock options typically taxed upon acceptance.
Czech Republic Deferred tax until triggering event such as sale, termination, liquidation, or 10 years from acquisition for all companies. Deferred taxation Triggering event Adjusted income if share value decreases Retroactive tax impact on prior grants if exercised post-2024 All company sizes None Available to employees and contractors, with broad company
eligibility.
Denmark Tax-free if yearly value <20% of salary and held for 3 years; gains
taxed at flat capital gains rate on sale. No tax at exercise for qualifying cos 3 years Flat capital gains rate Taxed as employment income if conditions not met Max grant value: 20% of annual salary None Primarily for employees; limited scope for board members or
contractors under strict conditions.
Estonia No tax at exercise if held for 3 years, gains taxed at 20% on sale. No tax at exercise if held >3 years. 3 years 20% personal income Taxed as employment income if exercised <3 years unless exempted No cap on options or company size None Open to employees; also accessible for contractors, with flexibility for various company structures.
Finland Stock options taxed as income at exercise and as gains at sale. Taxed as income at exercise Not available Not available Not available Not available None Open to employees and some contractors, subject to standard income tax.
France BSPCE scheme: no tax at grant/exercise for companies <15 years old,
<250 employees, <‚Ǩ50M turnover. Gains taxed at flat rate Tax-free at grant/exercise 3 years Flat rate on gains Not available Young, small companies AGA (Attributions Gratuites d’Actions): Allows companies to grant free shares with reduced social taxes if held for 2 years. Designed for both SMEs and larger companies; taxed at a lower rate if conditions met. Open to employees in eligible companies under BSPCE scheme;
contractors are generally excluded.
Germany Deferred tax for SMEs and startups under €100M revenue and <1,000
employees, with capital gains tax if held >1 year. No tax at exercise for qualifying SMEs 1 year Capital gains tax (flat rate) Taxed at exercise if non-qualifying company Limited to qualifying startups and SMEs None Limited to employees in qualifying SMEs and startups; not
available for contractors or board members.
Greece No personal income tax at exercise if held for 2 years (3 years for
startups); gains taxed at 15% on sale, 5% for startups. No tax at exercise if held >2 years 2 years (3 years for startups) 15% (5% for startups) Taxed as employment income if exercised early Beneficiaries must own <0.5% of company None Eligible for employees only, with specific limitations on
shareholding (must not hold >0.5%).
Ireland Deferred tax until shares sold if held for 1 year. No tax at exercise if held >1 year. 1 year Capital gains tax (rate varies) Not taxed as employment income if held >1 year EUR100k per year or EUR300k total per individual KEEP (Key Employee Engagement Programme): Allows qualifying companies
with <250 employees and <EUR50M turnover to defer tax until sale if
shares held for 1 year. Extended until 2025 as a key support for SMEs. Primarily aimed at employees, with restricted access for
contractors and board members.
Italy Tax-exempt at exercise for Innovative Startups and SMEs; taxed at flat
rate on sale. No tax at exercise for qualifying cos Varies Flat rate at sale Taxed as employment income at progressive rates if non-qualifying company Only for Innovative Startups and SMEs None Restricted to employees in qualifying Innovative Startups and
SMEs.
Latvia Deferred tax until sale if options held for at least 12 months. No tax at exercise if held >12 months. 12 months 20% capital gains Taxed as employment income if exercised <12 months No cap on stock options or company size None Open to employees without specific restrictions; contractors and board members are also eligible.
Lithuania No tax at exercise if held for 3 years; gains taxed at flat rate on sale. No tax at exercise if held >3 years. 3 years Flat rate on gains Taxed as employment income if exercised early No cap on options or company size None Open to employees without additional restrictions; contractors may
be included.
Netherlands Employees can defer tax to when shares become tradable or 5 years after
exercise, taxed at income tax rates. Deferred income tax 5 years or until shares tradable Incremental income tax Deferred tax requires employee choice; income/capital gains applied based
on timing. State approval required for all stock option plans No other formal schemes, though recent updates reflect a movement toward
addressing tax deferral needs. Primarily available to employees; state approval may impose additional requirements.
Norway Startup scheme: tax deferred to sale if the company is <10 years old,
<50 employees, <NOK 80 million. No tax at exercise for startups Not available (specific to startups) Flat rate on capital gains Taxed as income for other companies Startups only with strict conditions None Restricted to employees in small qualifying startups, with strict limitations on company scope.
Poland No personal income tax at exercise if held for 2 years; gains taxed at a
flat rate on sale. No tax at exercise if held >2 years. 2 years Flat rate on gains Available only for joint-stock SMEs and startups Only for certain joint-stock and simple JSC SMEs None Primarily for employees, but also includes contractors and board
members if they hold <5% of shares.
Portugal Deferred tax until sale if held for 2 years, gains taxed at 50% of value
at 28%. No tax at exercise if held >2 years. 2 years Effective 14% on gains Treated as employment income if exercised <2 years Startups and SMEs with <250 employees, <EUR50M None Available for employees only, typically within startups and SMEs as per criteria.
Spain Startup scheme: employees receive up to EUR50,000/year in stock options tax-free if held for 3 years; taxed on sale at scaling rate. No tax at exercise if held >3 years 3 years Scaling rate Taxed as employment income if sold <3 years Certified Emerging Companies, with <5 years old, <EUR10M turnover None Open to employees in Emerging Companies; must meet specific
certification requirements.
Sweden Tax-free exercise if held for 3 years; gains taxed at flat rate on sale
for companies with <150 employees, <SEK 280 million. No tax at exercise if held >3 years 3 years Flat rate on sale Taxed as income if conditions not met Limited to companies with <150 employees, <EUR25M None Open to employees in qualifying SMEs with restrictions on the
company size.
Switzerland Stock options are subject to income tax at the point of exercise. Taxed as income at exercise Not available Not available Not available Not available None Available to employees; contractors and board members typically included under general taxation.
United Kingdom EMI (Enterprise Management Incentive): No tax on grant/exercise if shares
held >2 years; capital gains tax on sale. No tax at exercise for EMI scheme 2 years Capital gains tax Taxed as income if conditions not met SMEs with <250 employees, <£30M in assets CSOP (Company Share Option Plan): Tax-free on grant/exercise for options
up to £60,000; capital gains tax at sale. SIP (Share Incentive Plan): Up to
£3,600 free shares per year tax-free if held for 5 years; CGT may apply at
sale. SAYE (Save As You Earn): Employees save up to £500/month over 3-5 years to buy shares tax-free at exercise; capital gains tax at sale. EMI scheme limited to employees working >25 hours/week or

75% of their time; excludes contractors and most board members. |