Possible change in stock options plans taxation rules in the Netherlands

More and more employers provide stock option plans to their employees. A stock option gives the employee the right to buy a share in the company for a pre-set price (option exercise price). If the value of the share increases, this is in benefit of the employee because the value of his share increases too. The ability to exercise a stock option is often based on certain criteria for the employee, such as a number of years in service.

Employee tax liability

Under current Dutch law stock option plans can trigger a taxable event for the employee when the stock option is exercised. At this taxable point the taxable gain is subject to income tax under box 1 (income from employment).

Proposed new rules

The Dutch government has proposed new legislation to make stock option plans more attractive. Under the new rules, taxation can be deferred to when the stock option is tradeable.

The new rules should make it more attractive for startups in the Netherlands to give their employees a stock option plan.

The newly proposed employee stock option rules are expected to enter into force on January 1, 2022. Bram Bogaard

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