Online message – Thursday 03/02/2023
International | On the taxation of stock options (BFH)
In the case of cross-border situations, any contractual exemption of income depends on the activity during the vesting period. So far Art. 15 para. 1 sentence 1 DBA-USA 1989/2008 to a “resident in a contracting state”, on the other hand, only residence i. p. des Species. 4 DBA-USA 1989/2008 at the time the income was received (; published on
).
Facts: The parties dispute the tax consequences of exercising stock options in the event of a change of residence.
The BFH states:
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The Lower Tax Court correctly assumed that the plaintiff’s income from the stock options is taxable under national law.
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The FG wrongly based the criterion of residency on the vesting period. For Art. 15 para. 1 sentence 1 DBA-USA 1989/2008, which refers to a “resident of a Contracting State”,
is instead solely the residency within the meaning of the Species. 4 DBA-USA 1989/2008 at the time of inflow. -
The pecuniary benefits from the exercise of the stock options – regardless of taxation at the time the options are exercised –
period related granted and are therefore allocated proportionately to the vesting period. According to the inducement principle, it is basically about the period between the granting of the stock options and their first exercisability. However, a conclusive assessment is only possible on the basis of the specific agreements made when the stock options were granted and the other circumstances of the individual case.
Those: ; NWB Datenbank (JT)
Source(s):
NWB CAAAJ-34754