2018 Global Employee Equity at a glance: Belgium | White & Case LLP International Law Firm, Global Law Practice
2018 Global Employee Equity at a glance: Belgium

2018 Global Employee Equity at a glance: Belgium

Welcome to the Belgium page of our Global Employee Equity at a glance series. To view other countries in this series, please visit our 2018 Global Employee Equity at a glance page.

If you would like a copy of the full Global Employee Equity at a glance please register your interest here.

TABLE OF CONTENTS

Stock Option Plans
Employment
Regulatory
Tax

Restricted Stock and RSUs
Employment
Regulatory
Tax

Employee Stock Purchase Plans
Employment
Regulatory
Tax

 

Stock Option Plans: Employment

Labor Concerns

There is a risk of employees claiming that they are entitled to compensation for loss of rights under the Plan where the Plan is amended or discontinued or where their employment is terminated. In particular, there is a risk that an employee dismissed without cause may be treated by a court as a good leaver.

There are laws that prohibit discrimination against, and/or less favorable treatment of, employees on certain grounds, including age, gender, disability and part-time status. Companies should be mindful of this when determining the eligibility of employees to participate in the Plan, the benefits being granted and the exercise of any discretion.

Communications

A disclaimer should be included in the award agreement that acknowledges each employee's receipt of the Plan documents and the discretionary nature of the Plan and confirms that termination of employment will result in loss of unvested rights.

The Plan documents and all related communications should be translated into the appropriate local language, namely: Dutch for the Flemish region, French for the Walloon region and French and/or Dutch for the Brussels region.

Government filings may be required to be in French or Dutch.

Electronic execution of award agreements may be acceptable under certain conditions, which are not onerous.

[Go back to top of page]

 

Stock Option Plans: Regulatory

Securities Compliance

Neither the grant nor the exercise of Options is likely to trigger any prospectus requirements.

Foreign Exchange

There are no foreign exchange restrictions applicable to the Plan.

Data Protection

Processing of employee data for purposes directly connected to the employment relationship can generally be justified on the basis that the processing is necessary to fulfill the contract of employment. Purposes outside that category need to be assessed on a case-by-case basis, and opt-in consent may be required in some cases. In all cases, companies should provide employees with a privacy notice describing what personal data is being collected and how the data is being used (including details of data sharing with third parties).

[Go back to top of page]

 

Stock Option Plans: Tax

Employee Tax Treatment

Options accepted within 60 days of offer will be taxed on the 60th day after offer (a qualifying stock option) on a percentage of the value of the underlying Stock at the time of grant (starting at 18 percent of the value of the underlying Stock, and increasing based on the period for which the Option is valid).

An "offer" will be deemed to have been made once the employee is informed of the key terms of the grant (usually when grant documents are distributed).

In the case of a qualifying stock option, the employee will not be subject to tax on the exercise of the Options or the sale of the Stock.

Options accepted after 60 days from offer (i.e., non-qualifying stock options) will be taxed on the gain on exercise (i.e., the excess of the market value of the Stock acquired over the aggregate exercise price).

Social Security Contributions

In general, no social security contributions are due, unless:

(i) in the case of non-qualifying stock options, the Issuer recharges the costs of the Plan to the Subsidiary; or

(ii) in the case of qualifying stock options, the Options are "in the money" (i.e., the exercise price is less than the value of the underlying Stock as determined on the date of the offer).

Tax-Favored Program

Favorable tax treatment may be available in the case of a qualifying stock option if certain conditions are met, including if the employee undertakes not to exercise the Options before the third anniversary of grant or after the tenth anniversary of grant. If the conditions are met, the above-mentioned percentage will be halved.

Withholding and Reporting

The Subsidiary has no withholding obligation, save where it participates in the execution of the Plan (e.g., by carrying out administrative activities relating to the Plan) or reimburses the Issuer for the costs of the Plan.

Reporting requirements apply only to the extent any income tax or social security contributions have been withheld.

Specifically with regard to qualifying stock options, even if they are granted directly by a parent company (or another affiliate), the employer (subsidiary of the parent company) has to mention the qualifying stock options on the relevant fiscal form(for employees this is fiscal form 281.10, for company directors this is fiscal form 281.20).

Employer Tax Treatment

A deduction is available if the Subsidiary reimburses the Issuer for the costs of the Plan. A written reimbursement agreement is required (setting out the criteria used to establish the amount to be paid by the Subsidiary).

[Go back to top of page]

 

Restricted Stock and RSUs: Employment

Labor Concerns

There is a risk of employees claiming that they are entitled to compensation for loss of rights under the Plan where the Plan is amended or discontinued or where their employment is terminated. In particular, there is a risk that an employee dismissed without cause may be treated by a court as a good leaver.

There are laws that prohibit discrimination against, and/or less favorable treatment of, employees on certain grounds, including age, gender, disability and part-time status. Companies should be mindful of this when determining the eligibility of employees to participate in the Plan, the benefits being granted and the exercise of any discretion.

Communications

A disclaimer should be included in the award agreement that acknowledges each employee's receipt of the Plan documents and the discretionary nature of the Plan and confirms that termination of employment will result in the loss of unvested rights.

The Plan documents and all related communications should be translated into the appropriate local language, namely: Dutch for the Flemish region, French for the Walloon region and French and/or Dutch for the Brussels region.

Government filings may be required to be in French or Dutch.

Electronic execution of award agreements may be acceptable under certain conditions, which are not onerous.

[Go back to top of page]

 

Restricted Stock and RSUs: Regulatory

Securities Compliance

Neither the grant nor the vesting of Restricted Stock or RSUs is likely to trigger any prospectus requirement.

Foreign Exchange

There are no foreign exchange restrictions applicable to the Plan.

Data Protection

Processing of employee data for purposes directly connected to the employment relationship can generally be justified on the basis that the processing is necessary to fulfill the contract of employment. Purposes outside that category need to be assessed on a case-by-case basis, and opt-in consent may be required in some cases. In all cases, companies should provide employees with a privacy notice describing what personal data is being collected and how the data is being used (including details of data sharing with third parties).

[Go back to top of page]

 

Restricted Stock and RSUs: Tax

Employee Tax Treatment

For Restricted Stock, an employee is generally subject to income tax on the value of the Restricted Stock when it is granted.

For RSUs, an employee is generally subject to income tax on the value of the Stock received on vesting.

No capital gains tax is payable on any gain upon the net proceeds of the sale of the Restricted Stock or Stock.

Social Security Contributions

In general, no social security contributions are payable unless the Issuer recharges the costs of the Plan to the Subsidiary.

Tax-Favored Program

Favorable tax treatment, in the form of a reduction of the taxable benefit, will apply at grant (for Restricted Stock) and vesting (for RSUs) if there is a restriction on disposal of the Stock for at least two years.

Withholding and Reporting

The Subsidiary has no withholding obligation save where it participates in the execution of the Plan (e.g., by carrying out administrative activities relating to the Plan) or reimburses the Issuer for the costs of the Plan.

Reporting requirements apply only to the extent any income tax or social security contributions have been withheld.

Employer Tax Treatment

A deduction is available if the Subsidiary reimburses the Issuer for the costs of the Plan. A written reimbursement agreement is required (setting out the criteria used to establish the amount to be paid by the Subsidiary).

[Go back to top of page]

 

Employee Stock Purchase Plans: Employment

Labor Concerns

There is a risk of employees claiming that they are entitled to compensation for loss of rights under the Plan where the Plan is amended or discontinued or where their employment is terminated. In particular, there is a risk that an employee dismissed without cause may be treated by a court as a good leaver.

There are laws that prohibit discrimination against, and/or less favorable treatment of, employees on certain grounds, including age, gender, disability and part-time status. Companies should be mindful of this when determining the eligibility of employees to participate in the Plan and the exercise of any discretion.

Communications

A disclaimer should be included in the award agreement that acknowledges each employee's receipt of the Plan documents and the discretionary nature of the Plan and confirms that termination of employment will result in loss of unvested rights.

The Plan documents and all related communications should be translated into the appropriate local language, namely: Dutch for the Flemish region, French for the Walloon region and French and/or Dutch for the Brussels region.

Government filings may be required to be in French or Dutch.

Electronic execution of award agreements may be acceptable under certain conditions, which are not onerous.

[Go back to top of page]

 

Employee Stock Purchase Plans: Regulatory

Securities Compliance

It is possible that a prospectus will be required for participation in the Plan to be offered to employees in Belgium. However, certain exemptions, exclusions and interpretations may be applicable and, in practice, a prospectus is rarely  required. For example, offers made to no more than 150 persons in any one Member State are exempt and certain Issuers, including those incorporated or listed in a Member State, are required only to publish summary information about the Plan and the Stock in substitution for a prospectus. Where a prospectus is required, the Issuer may be able to take advantage of a short-form regime under which certain requirements for the prospectus' contents are waived. Any prospectus must be approved by the relevant regulatory authority in the Issuer's Home Member State and filed under the passporting system with the relevant regulatory authority of each Member State in which participation in the Plan is being offered.

Foreign Exchange

There are no foreign exchange restrictions applicable to the Plan.

Data Protection

Processing of employee data for purposes directly connected to the employment relationship can generally be justified on the basis that the processing is necessary to fulfill the contract of employment. Purposes outside that category need to be assessed on a case-by-case basis, and opt-in consent may be required in some cases. In all cases, companies should provide employees with a privacy notice describing what personal data is being collected and how the data is being used (including details of data sharing with third parties).

[Go back to top of page]

 

Employee Stock Purchase Plans: Tax

Employee Tax Treatment

An employee is generally subject to income tax on the value of any discount when the Stock is purchased. No capital gains tax is payable on any gain upon the net proceeds of sale of the Stock.

Social Security Contributions

In general, no social security contributions are due unless the Issuer recharges the costs of the Plan to the Subsidiary.

Tax-Favored Program

If there is a restriction on disposal of the Stock for at least two years after the date of purchase, then the value of the taxable benefit may be limited to a proportion of the market value of the Stock.

Withholding and Reporting

The Subsidiary has no withholding obligation unless it participates in the execution of the Plan (e.g., by carrying out administrative activities relating to the Plan) or reimburses the Issuer for the costs of the Plan.

Reporting requirements apply only to the extent any income tax or social security contributions have been withheld.

Employer Tax Treatment

A deduction is available if the Subsidiary reimburses the Issuer for the costs of the Plan. A written reimbursement agreement is required (setting out the criteria used to establish the amount to be paid by the Subsidiary).

[Go back to top of page]

 

2018 Global Employee Equity at a glance

Employment, Compensation & Benefits practice group

 

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2018 White & Case LLP