3 ms·
Then employees would need to immediately pay tax on the stock based on the last valuation.
by rfrey 6y ago
Then employees would need to immediately pay tax on the stock based on the last valuation.
- messe 6y agoI'm not sure about stock options, but RSUs are reasonably common in Ireland. Tax isn't paid on them until the vest date.
- smachiz 6y agoRSUs work because they're typically for already public companies. At vest, in the US, a percentage of shares are immediately sold to cover taxes. With illiquid stock - as in a startup - where there's no public market for it, and no one to sell it to, you can't really do that, and you're creating a tax problem for your employees. The company can pay those taxes on your behalf - but that's expensive when a startup is explicitly paying in stock because they need the cash to grow.
- holoduke 6y agomost European countries use Sars (stock appriciation right) tax is collected at the very end. against a 50% tax cut though (in most EU countries)