It is also subject to social contributions

What is it

These are rights allocated to a number o employees o a company. Under this authorization, they may buy shares o their company, at a predetermined price during a gi en period.

In act, there are two types o stockoptions plans. Either they gi e rise to the subscription o new shares issued as undraising by the bene iciaries. Either the titles come rom redemptions in the stock market, the company buying back its own shares pre iously.

The creation o plans is decided by the extraordinary General Assembly. It allows leaders to make subscription or purchase o ers. It also sets the time during which lea e may be used (knowing that the period may not be less than thirty-eight months). It then delegates to the body o management (Board o directors or Executi e Board) care to ix the conditions or granting. Namely: who will be the bene iciaries, how many shares will be allocated, at what price can options be exercised

On this last point, you should know that, i it is a listed company, the maximum discount by stock price the day o the grant o the options is 20 in terms o subscription and 5 or share buyback plan. I the company is not listed, the amount o the rebate is le t to the discretion o the leaders.

Similarly, on the personality o the bene iciaries can be collaborators and the executi es o the company itsel . Thus can bene it rom plans to stock employees and leaders o companies which hold more than 10 o the capital o the issuer. But are also eligible employees and managers o the companies in which the issuer has more than 10 o the capital. And e en then the employees and o icers o sister companies i they hold more than 50 o the capital.

Con ersely, options can be attributed to employees who hold more than 10 o the capital, not more than the non-employee directors or persons in possession o more than 10 o the capital.

What tax

It was amended by the Act o 27 April 2000, the taxation o stock options breaks down into three distinct le els. It must irst consider the imposition o the rebate, i.e. the di erence between the price which it is proposed to subscribe to the action and its e ecti e course on the market the day where the o er is made.

Then, should consider the added alue o acquisition. There, it is the di erence between the alue o the title to the date o the exercise o the option and the subscription price. inally, there is the imposition o surrender alue: the di erence between the sale o the shares on the stock market course and the course o li ting o the shares.

Concerning deadlines, the Act o 27 April 2000, reduced rom i e to our years the period o una ailability, i.e. the time to respect between the allocation options and the trans er o the shares on the market. The taxation o capital gains o acquisition has been increased or the part exceeding 152.500 euros. Howe er, it has been reduced or oluntary portage o the shares li ted or two additional years.

The time o una ailability o our years be ore the trans er o the shares may be di ided at its discretion. Between the period be ore li ting and the period a ter thrown, it may break between two years and two years, three years and one year, one year and three years... Note howe er that some options plans set a minimum period to meet be ore li ting options.

In any e ent, the arious tax regimes are the ollowing:

Tax discount: i it is less than or equal to 5, it is taxed at the same time as the bene it o the added alue o acquisition. I it is greater than 5, it enters the calculation o the income tax. It is also subject to social contributions.

Taxation o the alue o acquisition: in be ore assignment our years, it is subject to the IR and social contributions. More than our years, but without additional time o retention o the shares or two years, the tax rate is 41 (or the rate o IR o the recipient) or the added alue o less than 152.500 euros acquisition. Abo e, it is 51.

or assignment a ter our years and an additional period o retention o the shares or two years, the added alue o acquisition is taxed at 27 i it rises below 152.500 euros and 41 i it is greater. There ore, as obser ed in Eric ranceschini, "it is known that at the time o the inal trans er o the shares what will be the tax on the added alue o acquisition, depending on whether shares will be sold or our years, between our and six years or six years".

inally, with regard to the taxation o the added alue o assignment, it is imposed on 27.