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Granting equity in 

the 

Austria

 

Get to know everything about your taxation and reporting obligations in 

the 

Austria

Looking to offer equity to team members in 
Austria
?
Try Easop

Introduction

Regular employee

NSO

You can definitely grant non-qualified stock options (NSO) to local residents in Austria.

  • There will be no taxation before the time of exercise of the stock options.
  • The company will be responsible for reporting the taxable amount at exercise.
  • The spread will be subject to wage tax (progressive income tax rates that go from 20% up to 50%) and ancillary wage costs.
  • At the time of sale, the grantee will be responsible for reporting any capital gains made, which are taxed at a flat rate of 27.5%.

There are some tax benefits but they are limited and subject to conditions which are difficult to fulfill.

A way to reduce taxation for the grantee would be to allow the grantee to “early exercise” the stock options (i.e. exercising stock options that have not vested yet). Depending on the company's legal budget and internal resources, allowing early exercises might be not recommended.

Employee via EoR

NSO

You can definitely grant non-qualified stock options (NSO) to local residents in Austria.

  • There will be no taxation before the time of exercise of the stock options.
  • When the grantee has informed the company of his/her decision to exercise his/her stock options, the company should inform the Employer of Record (EoR) that the grantee is about to exercise his/her stock options. The EoR needs to comply with its wage tax reporting obligations in relation to the exercise of the stock options, and they can’t do it if the company doesn't inform them.
  • The spread (i.e. the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price paid by the grantee) will be subject to wage tax (which the EoR will have to deduct) and ancillary wage costs. Wage is taxed at progressive income tax rates.
  • At the time of sale, the grantee will be responsible for reporting any capital gains made, which are taxed at a flat rate of 27.5%.
A way to reduce taxation for the grantee would be to allow the grantee to “early exercise” the stock options (i.e. exercising stock options that have not vested yet). Depending on the company's legal budget and internal resources, allowing early exercises might be not recommended.

Contractor

NSO

You can definitely grant non-qualified stock options (NSO) to local residents in Austria.

  • There will be no taxation before the time of exercise of the stock options.
  • At the time of exercise of the stock options, it’s likely that the contractor will have to issue an invoice including the amount of the spread (i.e. the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price) to the company, as if the contractor was receiving standard remuneration for services performed for the company.
Stock options are traditionally granted to employees. When it comes to contractors, the taxation rules are less clear so it’s important for the contractor to check the applicable tax treatment for his/her personal situation with a personal tax advisor at the time of exercise of the stock options and at the time of sale of the shares!
A way to reduce taxation for the grantee would be to allow the grantee to “early exercise” the stock options (i.e. exercising stock options that have not vested yet). Depending on the company's legal budget and internal resources, allowing early exercises might be not recommended.

Want to know more about equity in 

the 

Austria

?

Discover everything you need to know about taxation and reporting obligations for you and your team in 

the 

Austria

Get in touch