Worldwide: International Employee Stock Plans: 2019 Mid-Year Developments

This White Paper highlights some recent developments in certain countries relating to employee stock plans offered by multinational companies to employees in such jurisdictions.


New Tax Withholding Obligations

Effective March 1, 2019, employers in Belgium are required to withhold and report wages when an equity award is considered taxable, regardless of whether the local entity is involved in the grant process (e.g., through a recharge of costs). One unusual consequence of this new tax withholding requirement relates to the taxation of qualified stock options. Any tax qualified stock options for which the 60th day following the offer date under Belgian tax rules occurs on or after March 1, 2019, are now subject to wage withholding on the 60th day (which is considered the date of grant in Belgium). Taxes must be remitted to the tax authorities by the 15th day of the month following the month in which the date of grant occurs.

Because stock options are typically not immediately exercisable at grant so that shares cannot be sold to cover the tax obligation, companies must determine how to collect the taxable amounts. Please note that there are limitations on the amount that an employer may deduct from an employee's salary if the tax obligations are satisfied in that manner.

In terms of reporting, for qualified options, employer tax reporting will continue to be due by March 1 of the year following the year in which the options were taxable. With respect to all awards other than qualified stock options, transitional reporting rules will apply.


Amendments to Danish Stock Option Act

The Danish government amended the Danish Stock Option Act, effective with respect to grants made on or after January 1, 2019, to generally eliminate the requirements for good leavers to retain equity awards after termination of employment and to receive additional awards after termination. The amendment generally applies only to awards granted in 2019 under an equity plan that was adopted in 2019. Companies can consider various approaches for purposes of applying the new rules to awards granted under older equity plans, which have different risk profiles. Please consult your global equity advisor to consider the best approach for your company if the underlying plan was adopted prior to 2019.

New Tax Reporting

For stock option exercises and restricted stock units ("RSU") that vest in 2019, the Danish subsidiary will be required to report such events to the Danish tax authorities. The report, which is due by January 20 of the year following the year in which shares are acquired pursuant to a stock option exercise or RSU vesting, must include the name of the issuer, the number of shares acquired, the acquisition date, and the purchase price (if any). In addition, at the time of grant of stock options, the Danish subsidiary must inform the tax authorities online about the grant (known as "making a mark in the Danish Income Register").


EU Prospectus Regulation

On July 21, 2019, the EU Prospectus Regulation ("Regulation") will fully come into effect and replace its predecessor, the EU Prospectus Directive ("Directive"). Like the Directive, the Regulation will require companies that grant equity awards and/or offer an employee stock purchase plan to their employees in the European Economic Area ("EEA") to register a securities prospectus in their home Member State with respect to such grants or offers unless an exemption applies.

However, unlike the Directive, public companies that do not have securities listed on a European stock market will be able to rely on the employee share scheme exemption under the Regulation. If a company decides to rely on the employee share scheme exemption under the Regulation, the company must issue an information memorandum to plan participants. Under the Directive, for companies that traded on an EU exchange and were able to rely on the employee share scheme exemption, this information memorandum requirement is not new, but it is advisable to have any previously prepared memorandum updated to ensure all requirements under the Regulation are being met. Companies that will be relying on the exemption for the first time after July 21, 2019, will need to prepare an information memorandum prior to the date on which they first intend to rely on the new exemption.

In addition, companies with equity grants in the European Union that were considered exempt under the Directive should consult their global equity advisors to ensure that they are still able to take that position without taking any further action. Some EEA Member States have adopted local securities rules that may require specific compliance. In many circumstances, utilizing an information memorandum for stock option or RSU awards may be the easiest alternative for compliance with these local securities rules.


PAYE Withholding

Effective January 1, 2019, Pay-As-You-Earn ("PAYE") was implemented in France. As a result, income tax must now be processed through payroll and withheld by employers rather than paid by employees with their annual tax filings. The introduction of the PAYE system is a significant change from the previous system, where personal income tax was directly declared and paid by employees the next calendar tax year.

Each year between October and November, the French tax authorities will provide the applicable tax rate for the relevant tax year to both employees and their employers. Rates should generally reflect the average personal income tax rate that was applied to the employees during the previous calendar tax year, but employees with privacy concerns may choose to have a nonpersonalized tax rate used instead. Employees may also elect to use a specific tax rate that would be tailored to their individual tax circumstances.

Employees are still required to file with the French tax authorities a yearly income tax return. However, employers must now, on a monthly basis, collect the withholding tax, file a return online with the French tax authorities (déclaration sociale nominative), and remit the tax amounts to their local tax office. Employers with more than 49 employees must remit the taxes before the fifth of each month, and employers are allowed to use a payroll services provider to meet their filing obligations.


Changes to Payroll Deduction Rules

The Singapore Employment Act was recently amended, effective April 1, 2019, so that certain provisions of the Act now apply to all employees, regardless of salary level. Previously, managerial and executive employees who earned more than S$4,500 were exempt from the Act. Such managerial employees are now entitled to annual leave, medical and hospitalization leave, and protection against wrongful dismissal, among other benefits.

In addition, the amendment provides that payroll deductions, including deductions for purposes of participating in a stock purchase plan, must be subject to the prior written consent of an employee, regardless of the employee's position or salary level. Any consent given may also be withdrawn by written notice to the employer. Although individual consent is now required, the payroll deduction process no longer requires Ministry of Manpower approval, which was necessary prior to this latest amendment to the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions