EQUITY GUIDE

OFFERING EQUITY TO YOUR TEAM IN

The

Spain

Looking to offer equity to international talent joining your team? No matter where in the world your team members work, Easop makes it easy for you to offer equity compliantly to direct employees, EoR employees and contractors hassle-free, worry-free, and cost-efficiently!

Firstly, who can receive NSOs?

Direct employees

YES

NO

EOR employees

YES

NO

CONTRACTORS

YES

NO

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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.

More comprehensive information for this country and its work relationships is available on Easop.

General Taxation

Learn about equity schemes and taxation policies in
the
Spain
.

At grant 👉 No taxation.

At exercise 👉 The spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) is taxed as salary income, taxed at progressive income tax rates depending on the tax residence of the employee. Social security applies.

At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” incom

At grant 👉 No taxation.

At exercise 👉 The spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) is taxed as salary income, taxed at progressive income tax rates depending on the tax residence of the employee. Social security applies.

At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” incom

At grant 👉 No taxation.

At exercise 👉 The spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) is taxed as “general” tax base, taxed at progressive income tax rates depending on the tax residence of the employee. Social security applies.

At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” incom

Tax advantages

Learn about equity schemes and taxation policies in
the
Spain
.
  • The employee, under certain conditions, may be entitled to a reduction on the spread taxable at the time of exercise.
  • There is a certain tax benefit available whereby, under certain conditions/restrictions, the employee can benefit from a tax exemption of a percentage of the taxable gain at exercise.
  • The fact that capital gains are less heavily taxed compared to salary income is a slight tax advantage (compared to standard cash bonuses). So, generally, the earlier the employee exercises, the better from a tax perspective as any increase in value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate.

  • There is a certain tax benefit available whereby, under certain conditions/restrictions, the employee can benefit from a tax exemption of a percentage of the taxable gain at exercise.
  • The fact that capital gains are less heavily taxed compared to salary income is a slight tax advantage (compared to standard cash bonuses). So, generally, the earlier the employee exercises, the better from a tax perspective as any increase in value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate.

  • There is a certain tax benefit available whereby, under certain conditions/restrictions, the contractor can benefit from a tax exemption of a percentage of the taxable gain at exercise.
  • The fact that capital gains are less heavily taxed compared to professional income is a slight tax advantage (compared to standard cash bonuses). So, generally, the earlier the contractor exercises, the better from a tax perspective as any increase in value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate.

Granting equity in 

the 

Spain

 

Get to know everything about your taxation and reporting obligations in 

the 

Spain

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.

More comprehensive information for this country and its work relationships is available on Easop.

Regular employee

✅ Yes, you can grant non-qualified stock-options (NSO) to employees in Spain.

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.

  • At exercise 👉 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) is taxed as salary income.

  • At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” income.

Is there a tax-favored scheme?

There are certain tax advantages your grantees may be eligible to, i.e.

  • 30% tax reduction  

  • EUR 12k exemption

it’s worth checking out the conditions!

Employee via EoR

✅ Yes, you can grant non-qualified stock-options (NSO) to EoR employees in Spain.

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.

  • At exercise 👉 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) is taxed as salary income.

  • At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” income.

Is there a tax-favored scheme?

There’s a certain tax benefit available whereby 30% of the taxable gain at exercise can be tax exempt, but there a few conditions/restrictions attached to this tax benefit.

Independently from the 30% reduction, the fact that capital gains are less heavily taxed compared to professional income 👇

💡 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

✅ Yes, you can grant non-qualified stock-options (NSO) to contractors in Spain.

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 (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 taxed under the “general” tax base.

  • At sale 👉 The sale price minus the fair market value of the shares at the time of exercise will be taxed as “savings” income.

Is there a tax-favored scheme?

There’s a certain tax benefit available whereby 30% of the taxable gain at exercise can be tax exempt, but there a few conditions/restrictions attached to this tax benefit.

Independently from the 30% reduction, the fact that capital gains are less heavily taxed compared to professional income 👇

💡 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.

Pay attention to:

⚠️ Upon exercise, over a certain value, the grantee may have to file an annual tax information report to the tax authorities. This only a reporting obligations, no taxes are due.

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