On 21 February 2002, the State Secretary of Finance published the long awaited Policy Statement dated 11 February 2002, with respect to the allocation of stock option income in cross-border situations.

The Policy Statement applies to all options that become unconditional after 1 January 2002. Therefore, the notice dated 19 August 1994 (no. IFZ 94/705.2) containing an earlier interpretation of the rules, is no longer valid with respect to such options. Consequently, for options that became unconditional prior to 1 January 2002, the 1994 notice will still apply.

Under the previous 1994 notice, stock option income was fully taxable in The Netherlands provided the employee was living and working in The Netherlands on the taxable date under Dutch tax law. No Dutch taxes were payable where the individual was living and working outside The Netherlands on the taxable date. Under the new Policy Statement, the tax authorities may apply a pro-rata allocation to the stock option income based on the time spent (i.e. day count) by employees performing employment duties in The Netherlands.

More information is available on the HRConsulting web site at the following address: http://www.hrconsulting.be/ias/docs/pwc_ftpsnl.pdf
If you need taylor-made advice in this respect please feel free to forward your request by return mail.