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
Yes, you can definitely grant non-qualified stock options (NSO) to local residents in Austria.
In a nutshell, what does taxation look like?
- At grant 👉 No taxation at grant.
- At exercise 👉 The spread will be subject to wage tax and ancillary wage costs.
- At sale 👉 The grantee will be responsible for reporting any capital gains made.
Are there tax advantages you should consider?
There’s no real tax favored scheme in Austria. There are some tax benefits but they are limited and subject to conditions which are difficult to fulfil.
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 require some additional paperwork.
Employee via EoR
Yes, you can definitely grant non-qualified stock options (NSO) to local residents in Austria.
In a nutshell, what does taxation look like?
- At grant 👉 No taxation at grant.
- At exercise 👉 The spread will be subject to wage tax and ancillary wage costs.
- At sale 👉 The grantee will be responsible for reporting any capital gains made.
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 require some additional paperwork.
Contractor
You can definitely grant non-qualified stock options (NSO) to local residents in Austria. Stock options are traditionally granted to employees. When it comes to contractors, the taxation rules are less clear.
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 👉 It’s likely that the contractor will have threat the spread as standard remuneration.
- At sale 👉 In most cases, the sale of the shares (at a price higher than the fair market value (FMV) at the time of exercising the stock options) would result in capital 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 require some additional paperwork.
