Stock options

  • If your employer grants you stock options during the time you are working outside of Germany, but you exercise these stock options during your assignment in Germany, the quesition arises regarding which country is entitled to tax the gain.
  • Exercising non-tradable stock options in Germany is a taxable event in this country (whereas granting these options is not taxable). The difference between the market value of the share and the strike price is generally subject to taxation.
  • Nevertheless, Germany only has the right of proportionate taxation for the period the person has been working within the country.
  • If the tax regulations of the countries involved differ, you may be faced with double taxation. For example, Belgian tax regulations stipulate a taxable event the moment the stock options are granted. However, exercising these stock options in Germany is taxable in Germany, which results in double taxation.
  • Most double taxation agreements provide for an agreement procedure to solve double taxation issues.
  • We will be happy to help you with strategic advice in this matter.