hrservices.be banner

Tools

PwC service offerings

Tags

accounting treatment Belgium capital-sharing company cars crisis measures double tax treaty employee employees employment tax EU Regulation 883/2004 exemption fiscal benefit Flanders foreign income HR environment HR Services Human Resources income tax indexation India Lambermont life insurance marital quotient system pensions personal income tax private PC profit-sharing profit participation PTX registration duties salary slips salary tresholds second company car severance pay social security treaty stock option stock option income tax taxation tax reduction tax reform tax treatment Uruguay withholding tax work permit

Site search

Subscribe to our HRS headlines

RSS RSS – HRS Headlines

Sharing knowledge
The Tax Guide in De Tijd/L'Echo was created with the help of our Personal Tax Consultants

Discover Global Office MyTaxes.pwc.com and GlobalSTAR, our worldwide HR & tax web tools

Calculate your car policy’s VAT cost

Go to Benefit in kind VAT impact calculator
17Feb

Tax Treatment of Non-Qualifying Options Granted Before 1999 – A never-ending story?

 

Context

Referring to the headlines of 17 January 2003(*) and 11 February 2004(**), you will recall that the Court of Cassation overturned two decisions of the Brussels Court of Appeal, which stated that pre-1999 options not qualifying under the Act of December 1984 are taxable at exercise, and that the gain realised when exercising such options constitutes taxable compensation. The Court of Cassation indeed found that it could not be concluded from the Act of 1984 that the gain realised when exercising pre-1999 options not qualifying under said Act constitutes taxable remuneration. The Court of Cassation even stated that the options should be taxed on their “attribution date”. This is to be understood according to the relevant meaning given in the Belgian income tax legislation. What the attribution date of pre-1999 options – i.e. the taxable date of pre-1999 options – might be, however, remained uncertain.

In this respect, clarification was expected to come from the ruling of the Court of Cassation on the appeal against the Antwerp Court of Appeal decision of 19 February 2002. The Antwerp Court of Appeal decided that the taxable moment was the exercise date on the basis of the fact that the options are of a “permanently precarious nature” until the date of exercise – i.e. on the basis of an argumentation totally different from the one developed by the Brussels Court of Appeal.

News

On 4 February 2005, the Court of Cassation confirmed the decision of the Antwerp Court of Appeal of 19 February 2002. Hence, it confirms that pre-1999 options of a “permanently precarious nature” are to be regarded as attributed – and therefore taxable – when exercised.

The least that may be learnt from this last decision of the Court of Cassation is that the taxable moment of pre-1999 options is to be identified on a case-by-case basis. This is likely to remain a difficult exercise in most of the cases where the pre-1999 options at stake are conditional.

(*) http://news.hrservices.be?200301171610
(**) http://news.hrservices.be?200402111807

Share

Posted: February 17th, 2005