Employee Stock Plans: Year-End International Reporting Requirements

This Commentary highlights the principle year-end reporting requirements for employee stock plans that we see repeatedly when U.S. multinationals offer these programs to their employees worldwide. Please note that this Commentary does not address routine, year-end tax reporting obligations. A chart summarizing these items appears at the end of this Commentary.

Canada

Tax Deferral Elections. Employees in Canada are generally required to recognize taxable income from stock options exercised during a calendar year. For those options granted over exchange traded shares with an exercise price equal to or exceeding the fair market value ("FMV") of the underlying shares at grant (generally, "prescribed shares"), the employee may defer tax on the spread at exercise up the first C$100,000 of options that vest in any calendar year (determined at the time of grant using the FMV of the shares at that time). This deferral continues until the employee sells the shares, dies, or