May 23, 2025 4 min read
The Internal Revenue Service has prepared an optional model form that employers can use to file a notice of intent to defer taxation of income from employee stock ownership plans (ESOP).
As we have already informed you in our regular Tax News, an amendment to the Income Tax Act is effective from 1 April 2025, under which deferral of taxation on ESOP income is voluntary. Deferral of taxation is now only possible by complying with a notification obligation to the tax administration, where the employer must notify the tax administration of its intention to defer taxation of ESOP income into the future to one of several statutorily defined times (e.g., sale of shares or leaving the company) by the 20th day of the month following the month, in which the employee acquired the shares. The employer (the payer of non-cash income from employment in the form of shares or interests provided, i.e. also the parent company abroad) has the obligation to report and cannot transfer this obligation to another entity (e.g. another entity in the group or the employee himself).
The amendment also applies to situations that occurred before the amendment came into force – if an employee acquired shares in the period from January to March 2025 before the amendment came into force, the employer must submit the aforementioned notification of the intention to postpone the moment of taxation to the tax administrator retroactively by 2 June 2025 at the latest. If it fails to meet its reporting obligation within this time period, this ESOP income will be deemed to have been cleared for the month of May 2025, or will be taxable on the employee’s own 2025 tax return, if the shares were received by the employee from an entity other than his legal employer.
We will be happy to assist you with preparing the notification to the tax office if you wish. We are closely monitoring the development of ESOP legislation and will keep you informed of any further changes.
Proposed Amendments to the VAT Act: Further Simplification for Trading within the European Union
The Supreme Court clarifies that loan interest payments made before insolvency do not automatically constitute preferential treatment if they arise from an economically balanced contractual relationship.
The Supreme Administrative Court Broadens the Interpretation of Related Parties for Thin Capitalisation Purposes
The OECD has published a draft update to Chapter VII of the OECD Transfer Pricing Guidelines, focusing on intra-group services.
The Court of Justice of the European Union ("CJEU") has handed down its highly anticipated judgment in Case C-603/24 (Stellantis Portugal). This follows the Opinion of Advocate General Juliane Kokott, which we discussed in our previous article ("Further reflections on the assessment of transfer pricing adjustments and VAT – Advocate General's Opinion in Case C-603/24 Stellantis Portugal | Grant Thornton").
The government-approved proposal for the so-called EET 2.0 plans for the return of the Electronic Registration of Sales (EET) as of January 2027, albeit in a different format than the one abolished in 2023.
In response to the increasing number of inquiries regarding the Unified Monthly Employer Report (hereinafter " JMHZ "), the Czech Social Security...
In sports, we generally assume that everyone plays by the rules. This trust is a natural part of the game, much like the fact that everyone on the field...
We recently brought to your attention a surprising judgment by the General Court of the EU in Case T-689/24 I.T.A. , in which the Court ruled that the right...
Group restructurings—encompassing changes in business character, the nature of transactions, or the roles and status of entities within a multinational...