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  • Stock options and international assignments - LeXcom Société d'avocats
    Court considers that the gain is only taxable as a salary in France when the activity from which the grant of stock options derived was performed on the French territory This interpretation of article 11 of the treaty between France and Belgium is in conformity with the OECD commentaries which state the Article allows the State of source the one in which the activity is performed to tax the part of the stock option benefit that constitutes remuneration derived from employment exercised in that State even if the tax is levied at a later time when the employee is no longer employed in that State Reference to the vesting period in order to allocate the right to tax the acquisition gain With respect to the determination of the employment services remunerated through these options the French Supreme Administrative Court states that when the stock option plan provides that the right to exercise the options is subject to the achievement of certain conditions the activity from which the grant of options derived is the one performed between the date of grant and the date on which the beneficiary is allowed to exercise these options The French Supreme Administrative Court is thus referring to the notion of vesting which appears in the OECD recommendations and in many French and foreign plans According to these principles the right to tax the acquisition gain is thus allocated between the States in which the taxpayer performed his employment activity during the vesting period on a pro rata basis based on the number of days worked by the beneficiary on each territory respectively Last the French Supreme Administrative Court explains that in the specific situation where the exercise of the options by the beneficiary is not restricted in any way by the plan the options are considered to be granted only with respect to the activity performed at the grant date Taxation of the whole acquisition gain is in this particular situation allocated to the State on the territory of which the employee performed his activity upon the date of grant of the options Conclusion The decision of the French Supreme Administrative Court is a significant step in solving issues raised by cross border situations with respect to incentives It seems nevertheless important to note that his decision was held under the former writing of section 163 bis C of the French Tax Code in a case where the holding period of the options was not met This acquisition gain was thus in accordance with French law taxable as employment income As a consequence the question of the tax treatment of this gain remains in cases where the holding period is met Although the additional salary nature of the acquisition gain is hardly challengeable since it results from the actual drafting of section 80 bis of the French Tax Code when the holding period is met the acquisition gain remains taxed as a capital gain on sale of securities under particular conditions and rates The deletion

    Original URL path: http://www.lexcom-lawfirm.com/stock-options-and-international.html (2016-02-10)
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  • Exceptional tax on bonuses paid by French banks and investment institutions (Corrective Finance Bill for 2010) - LeXcom Société d'avocats
    of tax whatever the year of payment or of vesting would be Consequently as long as such compensation items would find even partly their source in activities performed in 2009 they will be subject to such tax even in the event their actual payment would be deferred by one or several years The only compensation items excluded from the scope of the Draft Bill would be the amounts paid with respect to legal compulsory and non compulsory profit sharing schemes Participation and Intéressement which are already subject to a 4 special tax the forfait social Nature of the variable compensation items The tax is computed to only on cash variable compensation items but also on the ones granted through stock options conditional share awards or any other share based preferential awards This tax applies even if the awards are granted by a foreign parent company or subsidiary In case of grant of stock options or of conditional share awards the tax is computed on the fair value of the options shares or other securities as defined for IFRS purposes consolidated accounts The computation basis is therefore identical as the one of the special employer s contributions for the above defined beneficiaries payable on such awards by French employers The tax is therefore likely in certain cases to be paid on compensation items which will never be actually paid out in the event the applicable conditions provided for the vesting of the awards would not be met Should this happen the draft bill provides that no amount of tax shall be reimbursed Rate and payability date The tax is due at the rate of 50 on the first day of the month following the grant decision The tax will be declared and paid within twenty five days of its payability date using a form which will be issued by the French tax administration The tax will be paid upon filing of the declaration However for bonuses paid before March 9 2010 the tax will be payable as from April 1st 2010 and before April 25 2010 Articles de cet auteur Autres Publications Compensation Benefits New withholding tax on share option gains 8 avril 2011 Par The Amending Finance Bill for 2010 created a withholding tax which applies to profits made by non residents on share option gains free shares and BSPCEs stock warrants for business creators Stock options and international assignments 26 mars 2010 Par Taxation of the gains derived from stock options in a cross border context has been a debated question for several years on the international scene However France unlike other European Stock Options and termination for cause 8 février 2010 Par The French Supreme Court confirmed for the first time in a decision dated October 21 2009 n 08 42 026 Nebon Carle c Sté Acxiom France that section L 1331 2 of the French labour code related Social security regime of the conventional termination indemnities and of Golden parachutes 21 septembre 2009 Par Circular of the

    Original URL path: http://www.lexcom-lawfirm.com/exceptional-tax-on-bonuses-paid-by.html (2016-02-10)
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  • Stock-Options and termination for cause - LeXcom Société d'avocats
    case of termination of the beneficiary s employment for gross misconduct Unlike the Court of appeals which considered such clause like any classical presence clause prevented the former employee from exercising her options the Supreme Court indicates that the deprivation of the rights to exercise the options in case of termination for gross misconduct is a prohibited financial sanction which cannot be set forth in a stock options plan The incriminated provision of the plan is therefore null and void but the actual consequences of such decision are yet to be determined Given the Supreme Court past case law regarding the validity if the presence condition and regarding the consequences of unfair dismissal with respect to option rights such consequences could be the following Either the stock option plan of the company provides for a presence condition for the employee to be entitled to exercise his options in such case the employee whose employment contract is terminated for whatever reasons could only be entitled to damages in compensation for the loss of his her options Or the stock option plan of the company does not provide for a presence condition in which case it might be considered that the options should not have been forfeited and that provided they did not expire for another reason they should remain valid in the hands of the beneficiary even though he she is no longer employed by the Company This case law is likely to apply to foreign plans providing for the forfeiture of the options in case of termination for cause It is therefore advisable when possible to avoid making any difference in a stock option plan between different cases of termination of employment of the beneficiaries This case law will most probably also apply to conditional awards plans such as Performance

    Original URL path: http://www.lexcom-lawfirm.com/stock-options-and-termination-for.html (2016-02-10)
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  • Social security regime of the conventional termination indemnities and of "Golden parachutes" - LeXcom Société d'avocats
    a full rate or not would not be entitled to benefit from the favorable social security regime provided for by section 80 duodecies of the French tax code In such a case the conventional termination indemnity would be subject to social security contributions to CSG and CRDS as from the first euro It would be the case of all employees aged 60 years and more Regarding employees aged between 55 and 59 years old who enter into a conventional termination agreement the employer will have to be able to provide the social security auditor with a document relating to the situation of the employee with regards to his rights to the basic retirement scheme Regarding employees who are not in a position to receive their retirement pension and who had less than one year seniority the indemnity shall be excluded from the basis of computation of the social security contributions as provided by section 80 duodecies of the rench tax code twice the amount of the compensation paid during the year preceding the one of termination of the employment contract or half the amount of the termination indemnity paid The indemnity is excluded from the basis of computation of CSG and CRDS up to the indemnity due prorated according to the number of month of presence in the company 2 Implementation of section 14 of the law dated December 17 2008 As from January 1st 2009 indemnities paid for an amount above thirty times the amount of the annual social security cap EUR 1 029 240 for 2009 are subject to social security contributions CSG and CRDS as from the first euro including when the amount of the indemnities corresponds to legal or conventional indemnities The other amounts paid if any upon termination of the employment contract and which are subject to social security contributions in normal conditions are not taken into account for the computation of the threshold Articles de cet auteur Autres Publications Compensation Benefits New withholding tax on share option gains 8 avril 2011 Par The Amending Finance Bill for 2010 created a withholding tax which applies to profits made by non residents on share option gains free shares and BSPCEs stock warrants for business creators Stock options and international assignments 26 mars 2010 Par Taxation of the gains derived from stock options in a cross border context has been a debated question for several years on the international scene However France unlike other European Exceptional tax on bonuses paid by French banks and investment institutions Corrective Finance Bill for 2010 26 mars 2010 Par The French Parliament adopted on March 9 the Corrective Finance Bill for 2010 which creates an exceptional 50 tax on variable compensations paid to some of their employees by bank Stock Options and termination for cause 8 février 2010 Par The French Supreme Court confirmed for the first time in a decision dated October 21 2009 n 08 42 026 Nebon Carle c Sté Acxiom France that section L 1331 2 of

    Original URL path: http://www.lexcom-lawfirm.com/social-security-regime-of-the.html (2016-02-10)
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  • Regulated agreements and corporate officers' compensation - LeXcom Société d'avocats
    be obtained such agreement may not be considered as null and void but the company may claim for damages against the corporate officer The French supreme Court confirmed this principle in a decision dated July 8 2009 where the company was claiming for the reimbursement of the amounts paid including a bonus to an employee who was also a delegate general manager and has been revoked after a change of control The Court recalled that the company could only claim for damages and only in the case it would be able to show that the payment of such amounts caused a damage to the company Regarding an employee s compensation it means according to the Court that the company should have shown that such amounts has been paid without consideration or were excessive and inappropriate which was not the case Articles de cet auteur Autres Publications Compensation Benefits New withholding tax on share option gains 8 avril 2011 Par The Amending Finance Bill for 2010 created a withholding tax which applies to profits made by non residents on share option gains free shares and BSPCEs stock warrants for business creators Stock options and international assignments 26 mars 2010 Par Taxation of the gains derived from stock options in a cross border context has been a debated question for several years on the international scene However France unlike other European Exceptional tax on bonuses paid by French banks and investment institutions Corrective Finance Bill for 2010 26 mars 2010 Par The French Parliament adopted on March 9 the Corrective Finance Bill for 2010 which creates an exceptional 50 tax on variable compensations paid to some of their employees by bank Stock Options and termination for cause 8 février 2010 Par The French Supreme Court confirmed for the first time in a

    Original URL path: http://www.lexcom-lawfirm.com/regulated-agreements-and-corporate.html (2016-02-10)
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  • New impatriates regime : additional information - LeXcom Société d'avocats
    to the employment contract For employees directly hired abroad the new regime offers a possibility to elect for an estimation of the impatriation premium equal to 30 of their total net compensation even if their employment contract provides for another amount for the premium Employer and employees reporting obligations Employer s obligation the employer must distinguish in the annual declaration of salaries between the normal compensation and the compensation items linked to the impatriation of the employee The impatriation items have to be declared in the exempted amounts in relation to the impatriate regime field of the declaration The amounts relating to the activity performed aborad must also be reported in this field Employee s obligations the option for the exemption cap chosen must be made in the field called other information of the annual personal income tax return n 2042 Tax exemption of certain foreign source income The new regime also provides for the exemption of personal income tax on the three following types of income Dividends Intellectual and industrial property income Capital gains on securities when the depositary or the company which shares are sold is established in a country which signed a tax treaty with France which contains an administrative assistance clause A list of such countries is annexed to the tax circular Such income is tax exempted on 50 of their amount until December 31 of the fifth year following the beginning of their activity in France Details regarding the filling of the tax return in respect of such income are given by the tax circular Articles de cet auteur Autres Publications Compensation Benefits New withholding tax on share option gains 8 avril 2011 Par The Amending Finance Bill for 2010 created a withholding tax which applies to profits made by non residents on share option

    Original URL path: http://www.lexcom-lawfirm.com/new-impatriates-regime-additional.html (2016-02-10)
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  • VAT on services - LeXcom Société d'avocats
    This new rule will imply a high level of vigilance to obtain and to ensure the validity of the VAT number of clients In order to audit the application of those new rules a new declaration will be created the declaration of exchange of services Articles de cet auteur Autres Publications Droit fiscal Transfer tax in case of shares held in a foreign real estate entity 7 juin 2010 Par The French tax administration rules on the possible use of a credit for foreign taxes Exceptional tax on bonuses paid by French banks and investment institutions Corrective Finance Bill for 2010 26 mars 2010 Par The French Parliament adopted on March 9 the Corrective Finance Bill for 2010 which creates an exceptional 50 tax on variable compensations paid to some of their employees by bank Social security regime of the conventional termination indemnities and of Golden parachutes 21 septembre 2009 Par Circular of the French social security direction dated July 10 2009 in relation to the new social security treatment of some termination indemnities Registration taxes 21 septembre 2009 Par A transfer of shares may be recharacterized into a transfer of going business Change in French business tax 21 septembre

    Original URL path: http://www.lexcom-lawfirm.com/vat-on-services.html (2016-02-10)
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  • Registration taxes - LeXcom Société d'avocats
    was in fact a transfer of going business subject to registration tax on the value of said going business No reference is made to any abuse of law in such Court which is in contradiction with numerous Court cases that denied such a re characterisation into a transfer of going business Articles de cet auteur Autres Publications Droit fiscal Transfer tax in case of shares held in a foreign real estate entity 7 juin 2010 Par The French tax administration rules on the possible use of a credit for foreign taxes Exceptional tax on bonuses paid by French banks and investment institutions Corrective Finance Bill for 2010 26 mars 2010 Par The French Parliament adopted on March 9 the Corrective Finance Bill for 2010 which creates an exceptional 50 tax on variable compensations paid to some of their employees by bank VAT on services 28 septembre 2009 Par VAT Directive implemented in France Social security regime of the conventional termination indemnities and of Golden parachutes 21 septembre 2009 Par Circular of the French social security direction dated July 10 2009 in relation to the new social security treatment of some termination indemnities Change in French business tax 21 septembre 2009

    Original URL path: http://www.lexcom-lawfirm.com/registration-taxes.html (2016-02-10)
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