The Law of 26 March 1999 addressing the tax treatment of stock options has been amended by the “Loi-Programme- Programma Wet” of 24 December 2002 (Official Gazette of 31 December 2002)(*). As mentioned in previous PTXheadlines, there are few changes of which the following two may be particularly relevant:

- For stock option plans implemented between 1 January 1999 and 31 December 2002, the company which offered the options may, before 30 June 2003, in agreement with the beneficiaries of the stock options, extend the exercise period of these options for a maximum 3 year period without additional Belgian personal income tax cost. This agreement to extend the exercise period must be notified to the Tax Authorities before 31 July 2003.

- From a Belgian personal income tax perspective, options will be deemed attributed on the 60th day following the offer date provided the beneficiary has ACCEPTED the stock option offer IN WRITING not later than the 60th day following the offer. Previously, the law of 26 March 1999 provided that the option was deemed attributed on the 60th day following the offer date, unless the beneficiary had refused the options in writing prior to the expiration of the 60-day deadline.

Thus taxation will not occur on the 60th day, unless the beneficiary has accepted the stock option offer in writing on a timely basis. The law does not provide any clarification with respect to stock options which were not properly accepted, but were still exercised, nor with respect to stock options which were accepted more than 60 days after the offer.

The new rules are expected to enter into force for option offers made as of 10 January 2003.

*http://www.hrconsulting.be/headline.html?lk=200301131 (as from art. 403)