Expected changes in employers’ tax reporting obligations of some equity incentives

Written by Nicolas de Limbourg 26 July 2018


When foreign headquartered companies grant stock options to employees of their Belgian subsidiaries, such option grants, where taxable at grant, are ALWAYS reportable by the Belgian employing subsidiary on the employee’s individual statement 281.10. This reporting obligation is due irrespective of whether such subsidiary is involved in the option grant or expenses the stock option in its financial statements.

So far, no equivalent reporting obligation existed where Belgian employees were granted free shares (Restricted Stocks or Restricted Stock Units) by the foreign parent company, except where the Belgian employing subsidiary was involved in the free grant of shares (which triggers a withholding tax obligation) or expenses the free grant of shares in its financial statements. Things are likely to change. Indeed, the ‘Job Deal’ agreed upon by the government would actually provide that such free grant of shares would ALWAYS become reportable to the Belgian tax authorities, like for stock options taxable at grant.

It is unclear at this point whether this new employers’ tax reporting obligation would also apply to shares purchased at a discount (including stock options taxable at exercise) and whether income tax/social security tax withholding obligations would be impacted by this new reporting obligation.
Please contact us for any further information in this respect.