The new Overseas Investment (OI) Rules issued on August 22, 2022 replace all previously available exemptions to grant share-based awards to Indian residents with a single exemption (the new “general permission”), which requires, inter alia, that semi-annual reports be filed with the Reserve Bank of India (RBI). The reports will need to be submitted by an Authorized Dealer Bank in India (i.e., the bank in India involved with the remittance of funds under the plan)…
Global equity award programs can be costly to the US parent corporation. One strategy to offset some of this expense can be to use recharge arrangements to transfer some of the cost to the local entities that award holders are employed by. This can produce a tax benefit at the local level that would not otherwise be available to the US parent. To consider if recharge arrangements should be included in your global equity plan,…
Why hire through a PEO? When companies start expanding internationally, it is often important to “put boots on the ground” as quickly and cost-effectively as possible. The traditional approach of establishing a local entity and employing employees through the local entity may not always work due to the cost and time involved in setting up and maintaining the local entity and local payroll, as well as the complexity of establishing and administering supplementary benefits. Aside…
Sweden has not been a country previously featured in this blog, but we have become aware that the Swedish Tax Agency (the “STA”) has contacted several local employers in recent months to seek clarification on the amounts withheld in relation to equity award income and correct the reporting where needed. We believe it is possible that many more companies could be audited with respect to their equity award tax withholding practices in 2019 and beyond.…
I hope most of you have seen our client alert on the recent Israeli Supreme Court ruling that confirmed that stock-based compensation has to be included in the cost base of Israeli subsidiaries of multinational companies. As a result of the decision, we have already seen a flurry of activity as many companies are evaluating how to obtain a tax deduction for awards granted to Israeli employees. As a reminder, for companies with a cost-plus…
Less than 18 months after the latest amendment to the regime for tax-qualified RSUs in France, another amendment became effective on December 30, 2016. This amendment is the third amendment to the regime in five years, meaning that companies may (in theory) have to administer tax-qualified RSUs that are subject to three different income tax and social tax regimes. The three different qualified RSU regimes are as follows: French-qualified RSUs granted after September 28, 2012…
Many companies are considering changing their tax withholding practices after FASB modified the accounting rules for share-based awards (ASC 718). For most companies, the modified rules become mandatory for accounting periods starting after December 15, 2016, although companies are able to voluntarily implement the revised rules earlier.
The changes to ASC 718 were mainly intended to facilitate tax withholding for equity awards granted to employees outside the U.S., but have also raised questions for taxes withheld for U.S. executives.
Welcome to my first blog on the fascinating topic of global equity and incentive awards. I am a partner with Baker & McKenzie (in our San Francisco office) and have focused on advising multinational companies on all aspects of their global equity and incentive programs for over 14 years. I will use the blog to share my thoughts on new (or not-so-new) developments that could affect your equity or incentive programs, best practices for…