Social security contribution can only be levied over Stock
Option Plans upon exercise of purchase option
In analyzing the taxation of Stock Option Plans, the 1st Panel
of the 3rd Chamber of the 2nd Section of CARF understood that the
triggering event of social security contributions due over earnings
received by the employee only occurs upon the exercise of the
purchase option.
The decision emphasized that Stock Option Plans, in general, are
divided in four moments: (i) granting of the Stock Option by the
company; (ii) vesting of the Stock Option by the beneficiary; (iii)
exercising of purchase option by the beneficiary, after vesting
period; and (iv) sale of the Option in the stock market.
