Let's get started

Just a few more details...

USA
Andorra
Argentina
Australia
Austria
Bangladesh
Belarus
Belgium
Bosnia & Herzegovina
Brazil
Bulgaria
Canada
Central African Republic
Chad
Colombia
Croatia
Cyprus
Czech Republic
Denmark
Ecuador
Egypt
Equatorial Guinea
Estonia
Ethiopia
Finland
France
Gabon
Georgia
Germany
Ghana
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Ivory Coast
Kenya
Latvia
Lebanon
Lithuania
Luxembourg
Malta
Mexico
Moldova
Montenegro
Morocco
Netherlands
New Zealand
Nigeria
Norway
Pakistan
Peru
Philippines
Poland
Portugal
Republic of the Congo
Romania
Senegal
Serbia
Singapore
Slovakia
South Africa
Spain
Sweden
Switzerland
Turkey
UAE
Ukraine
United Kingdom
Uruguay
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Granting equity in 

the 

Germany

 

Get to know everything about your taxation and reporting obligations in 

the 

Germany

Introduction

⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

Regular employee

âś… You can definitely grant non-qualified stock options (NSO) to employees in Germany!

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.

  • At exercise 👉 The spread is taxed as salary income.

  • At sale 👉 The difference between the sale price and the fair market value of the shares at the time of exercise is taxed as capital gain. There are certain tax advantages subject to certain conditions.
💡 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) but early exercises are not always easy to manage from the company’s perspective and on the grantee's side it may increase the risks of paying an exercise price (and taxes thereon) on something which may happen to be eventually worth nothing later down the road.

Employee via EoR

âś… You can definitely grant non-qualified stock options (NSO) to EoR employees in Germany!

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.

  • At exercise 👉 The spread is taxed as salary income.

  • At sale 👉 The difference between the sale price and the fair market value of the shares at the time of exercise is taxed as capital gain. T
💡 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) but early exercises are not always easy to manage from the company’s perspective and on the grantee's side it may increase the risks of paying an exercise price (and taxes thereon) on something which may happen to be eventually worth nothing later down the road.

Contractor

âś… You can definitely grant non-qualified stock options (NSO) to contractors in Germany!

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.

  • At exercise 👉 The spread is taxed as any professional income.

  • At sale 👉 The difference between the sale price and the fair market value of the shares at the time of exercise is taxed as capital gain.
💡 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) but early exercises are not always easy to manage from the company’s perspective and on the grantee's side it may increase the risks of paying an exercise price (and taxes thereon) on something which may happen to be eventually worth nothing later down the road.

Want to know more about equity in 

the 

Germany

?

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

the 

Germany

Get in touch