Change in taxation of share plans 

Jiří Šindelář
As part of today's newsletter, we would like to inform you about a significant change in the provision of employee shares. This is a popular benefit for employees, which has not yet been precisely defined in the tax regulations. These programs are often implemented by foreign parent companies, but they have an impact on employees who acquire shares or shares.

The Act on Income Taxes, effective from January 1, 2024, defines the moments for income from dependent activity that impose the obligation of taxation at the moment when the employee share or stock is acquired. These moments include, for example, the moment when the employee ceases to work for the given employer, the moment when the given share or stock is transferred (here the employee has the obligation to inform the employer of this fact), the moment when 10 years have passed from the date of acquisition of the share or the option, etc.

It is therefore obvious that the new Income Tax Act "shifts" the moment of taxation to a different fact than it was until now. Unfortunately, the given change was not reflected in the regulations in the field of health and social insurance, where taxation will still be governed by the currently valid interpretation rules. The employee must also not forget about taxation in his tax return at the time when he sells these shares and stocks (unless the income is exempt), because the discussed change changes the rules of taxation at the time when the shares are acquired.

If you wish to analyze the area in more detail, please contact us. We have extensive experience in implementing or revising these employee benefits and we will be happy to help you.

Tax advisory

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Jiri Sindelar
Jiří Šindelář
Tax Director