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>Working for a startup is an extremely risky decision. As a top engineer, you get shitty pay, and a really good options package that in most cases ends up being

>Working for a startup is an extremely risky decision. As a top engineer, you get shitty pay, and a really good options package that in most cases ends up being worth nothing because most startups fail. How about structuring it differently? If you e.g. don't receive options but actual shares? Hold those shares not by yourself but via a shell company. Then you never pay income taxes. Since you are in Europe, look up the successors of the current Double Irish. [1] https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement

fluffything 6y ago
> If you e.g. don't receive options but actual shares? Everything your employer gives you as part of your salary is subject to the salary tax. Whether your employee gives you options or shares, doesn't matter, you need to taxate them, and that requires assigning them a value. If your employer gives you options, you can only exercise them when the shares you buy have a value (via an IPO, acquisition, etc.), so you pay taxes on the value when you exercise them - verifying this value is trivial for the tax office (check purchase price of shares, IPO share value, etc.). For publicly traded companies, if your employee gives you shares, you pay taxes when you get the shares on the value of the shares on the day that you got them. If your employee gives you shares from a private hold company, those shares have no value until the company gets public or acquired. You'll taxate them not on the share price that the share had when you got them, but the one it has when it went public.
- fluffything 6y ago
  > You'll taxate them not on the share price that the share had when you got them, but the one it has when it went public. Imagine getting 1 million euros in shares, that you want to hold on for a couple of years because you believe they will be worth 10 million euros then. Well, to do that, you need to first pay 500k Euros in taxes (where you get them from is not the tax office problem). Then, if the stock goes from 1 to ten million, you need to again pay taxes on the 9 million win that you made (25%).

fluffything 6y ago

> If you e.g. don't receive options but actual shares? Everything your employer gives you as part of your salary is subject to the salary tax. Whether your employee gives you options or shares, doesn't matter, you need to taxate them, and that requires assigning them a value. If your employer gives you options, you can only exercise them when the shares you buy have a value (via an IPO, acquisition, etc.), so you pay taxes on the value when you exercise them - verifying this value is trivial for the tax office (check purchase price of shares, IPO share value, etc.). For publicly traded companies, if your employee gives you shares, you pay taxes when you get the shares on the value of the shares on the day that you got them. If your employee gives you shares from a private hold company, those shares have no value until the company gets public or acquired. You'll taxate them not on the share price that the share had when you got them, but the one it has when it went public.

fluffything 6y ago
> You'll taxate them not on the share price that the share had when you got them, but the one it has when it went public. Imagine getting 1 million euros in shares, that you want to hold on for a couple of years because you believe they will be worth 10 million euros then. Well, to do that, you need to first pay 500k Euros in taxes (where you get them from is not the tax office problem). Then, if the stock goes from 1 to ten million, you need to again pay taxes on the 9 million win that you made (25%).