We refer to our PTX headlines of 23 January, 18 October and 27 October 2002(*), regarding a possible change in the taxation of stock-options in Belgium. In this respect it should be noted that such possible changes have been inserted in Chapter 7 of the draft bill of Law entitled “PROJET DE LOI-PROGRAMME du 14 novembre 2002 / ONTWERP VAN PROGRAMMAWET van 14 November 2002″.

Based on this draft bill of Law, we note among other possible changes of the Law of 26 March 1999 that:

For stock option plans concluded between 1 January 1999 and 31 December 2002, the company which offers the options could, before 30 June 2003, by mutual agreement with the beneficiaries of the stock options, extend the exercise period of these options for a maximum 3 year period without additional Belgian income tax cost. The agreement to extend the exercise period must be notified to the Tax Authorities before 31 July 2003.

From a tax perspective, options would be deemed attributed on the 60th day following the offer date provided the beneficiary has accepted the stock option offer in writing no later than the 60th day following the offer. Under current stock option tax legislation the option is deemed attributed on the 60th day following the offer date if the beneficiary has not refused the options in writing prior to the expiration of the 60 day deadline. This would be a material change, as the options would, from a tax perspective, not be part of the beneficiary’s private estate if he omits to accept them in writing prior to the expiration of the 60 day deadline. The main question is when such option will be deemed to enter the private wealth of the beneficiary and thus become taxable if it is accepted after the 60 day deadline. This is an issue which require further clarification”

It should be stressed that the above is part of the draft bill of Law entitled “PROJET DE LOI-PROGRAMME du 14 novembre 2002 / ONTWERP VAN PROGRAMMAWET van 14 November 2002″ and may still be subject to amendment before being finally passed by the Chamber of Belgian Representatives.

The draft bill can be downloaded from the Chamber’s web site at the following addresses (document 2124/2) :
French: http://www.hrconsulting.be/headline.html?lk=200211251
Dutch: http://www.hrconsulting.be/headline.html?lk=200211252

(*) http://www.hrconsulting.be/headline.html?ph=200201231943
http://www.hrconsulting.be/headline.html?ph=200210181625
http://www.hrconsulting.be/headline.html?ph=200210272103