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! 💡
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Regular employee
Employee via EoR
You can definitely grant non-qualified stock options (NSO) to local residents in Belgium! It’s safe, and is probably one of the easiest options to incentivize your team members.
In a nutshell, what does taxation look like?
‍Belgium has a strange taxation system for ESOP, which can be summarized as a choice for the grantee between “tax me now, for sure, but softly”  and “tax me later, maybe, but hard”.
In both cases, it’s taxed as professional income (highly taxed in Belgium), but the taxation basis is much smaller in case of option 1, so grantees in early stage companies tend to follow that route.
If the grantee wants to be taxed at the time of grant, several formalities need to be done quickly after the grant.
As a rule, Belgium doesn’t tax capital gains, so the grantee won’t be taxed when the grantee sells their shares, but when the grantee has not chosen taxation at grant, the tax authorities could possibly try to tax the gains as a “miscellaneous income” or “professional income”.
Contractor
You can grant non-qualified stock options (NSOs) to local residents employed as contractors.
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?
‍Belgium has a strange taxation system for ESOP, which can be summarized as a choice for the grantee between “tax me now, for sure, but softly”  and “tax me later, maybe, but hard”.
In both cases, it’s taxed as professional income (highly taxed in Belgium), but the taxation basis is much smaller in case of option 1, so grantees in early stage companies tend to follow that route.
If the grantee wants to be taxed at the time of grant, several formalities need to be done quickly after the grant.
As a rule, Belgium doesn’t tax capital gains, so the grantee won’t be taxed when the grantee sells their shares, but when the grantee has not chosen taxation at grant, the tax authorities could possibly try to tax the gains as a “miscellaneous income” or “professional income”.
What if the contractor works via a personal management company?
Some contractors may work via a personal management company (which is common in Belgium). If that’s the case, the stock options should be granted to the management company, not to the natural person, because granting the stock options directly to the natural person would raise some legal and tax issues.
The grantee (i.e. the natural person providing services) should check with his/her tax advisor how to make sure the stock options can then be transferred to him/her.
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