CARF – Stock Option Plan

The Administrative Council of Tax Appeals – CARF, through its 2nd Section and in the last meeting held, judged the first two Stock Option cases, which examined whether the assessment for the non-collection of the social security contribution, pursuant to article 22, III, of Law no. 8,212/91, was correct when considering stock option plans as having a remuneration nature.

In his defense, the taxpayer in both cases claimed that the stock option plan does not have a remuneration nature, since it is included in contract law, presenting an option for and a need of payment when exercising the option right. Moreover, he stated that the plan meets the volunteer condition and market risk, meaning it is not a case of remuneration of employees, but rather a commercial contract.¹