Restricted stock is taxed upon grant. Only the amount of the granted shares exceeding a certain threshold (ie, EUR 2,065.83) would be taxed as employment income, provided that restricted stock are granted to all employees and the shares are non-transferable for a 3-year period.
RSUs are taxed upon vesting. Only the amount of the shares granted upon vesting (ie, the market value of the shares on vesting, less any price paid by participants) exceeding a certain threshold (ie, EUR 2,065.83) would be taxed, provided that RSUs are granted to all employees and the shares are non-transferable for a 3-year period.
A general rule governing employment income taxation set out by Italian tax law is that employment income must be computed on a cash basis, ie, income must be taxed once it has been actually received by the individual concerned. Employment income represented by the value of the RSUs, granted upon vesting, must be taxed with reference to the FY during which the RSUs concerned are actually delivered and received by the individual taxpayer. From the moment of vesting until the moment of actual delivery and receipt of the RSUs, the individual taxpayer holds a mere expectation which cannot qualify as taxable income, as clarified by the Italian Tax Administration.
Both restricted stocks and RSUs may not be taxed if they are granted as a form of productivity bonus, provided that the other law requirements are met.
Until December 31, 2018, the gain at sale is taxed as capital gain at 26% in case the shareholding represents a percentage of voting rights exercisable at the ordinary shareholders' meeting not exceeding 20% and a participation in the capital not exceeding 25% (for a private company).
Capital gains realized from January 1, 2019 are subject to a substitute tax at a rate of 26% (despite of the represented percentage of voting rights and the participation in the capital).
Please consider that if the shares are issued by a tax haven company the entire capital gain amount is subject to personal income tax (IRPEF) at the applicable progressive rates between 23% up to 43% (plus regional and municipal surtaxes if applicable). In order to be qualified as tax haven resident, the company has to be subject to an effective tax rate lower than 50% of the virtual Italian effective tax rate (ie, taxes to be paid it the company were Italian-tax-resident) or to a nominal tax rate lower than 50% of the applicable rate in Italy (ie, lower than 13.95%).
Special step-up rule may be annually introduced lowering capital gain taxation.
Withholding & reporting
Withholding and reporting are required.
If the parent company is reimbursed by the subsidiary for the cost of the benefits, the subsidiary should be able to deduct such costs from its income taxes.