Employee
Stock purchase plans are not taxed upon grant, or upon exercise.
Upon disposal:
If the purchased stock is disposed within 24 months (or 36 in the case of startup companies) from the grant of such stock purchase rights, then upon disposal, any benefit (difference between their market value upon exercise and their exercise price) is subject to personal income tax at progressive rates of up to 44 percent (special solidarity contribution has been abolished from 01.01.2023 and onwards) and special solidarity contribution at progressive rates of up to 10 percent (employment income is in principle exempt from special solidarity contribution for Tax Years 2021 and 2022). Furthermore, upon the sale of the stock disposed before the 24-month holding period (or 36 in the case of startup companies), any capital gains are taxable as per the general provisions.
If the stock purchased is disposed after 24 months (or 36 in the case of startup companies) from the grant of such stock purchase rights, then upon disposal, any benefit (difference between their market value upon exercise and their purchase price) is subject to personal income tax at a flat rate of 15 percent (or 5 percent for startup companies) (special solidarity contribution has been abolished from 01.01.2023 and onwards) and special solidarity contribution at progressive rates of up to 10 percent. In that case, no taxable event occurs upon exercise.
If the disposal value of the shares is higher than their market value upon exercise, then any difference is taxable as capital gains as per the general provisions. For listed companies, such capital gains are exempt from personal income (capital gains) tax (special solidarity contribution has been abolished from 01.01.2023 and onwards) and are subject to special solidarity contribution, assuming that the employee owns less than 0.5 percent of the share capital of the issuing company. For non-listed shares, such capital gains are subject to personal income tax at a flat rate of 15 percent (special solidarity contribution has been abolished from 01.01.2023 and onwards) and special solidarity contribution at progressive rates of up to 10 percent.
Employer
Withholding & reporting
If the subsidiary takes a local tax deduction for reimbursing the parent company for the cost of the benefits, employer reporting is required.
The Employer is not required to withhold any tax, however, is required to report the vesting of the stock purchase rights through the monthly withholding tax return for informational purposes. Further, the Employer is required to provide its employees with a separate annual payroll certificate regarding the stock options that were exercised.
Deduction
A local tax deduction is allowed if the subsidiary reimburses the parent company for the cost of the benefits.
Tax-favored
“Startup” companies, which are eligible for preferential tax treatment, meet the following criteria:
1) They are not listed;
2) They are considered as “small” or “very small” entities (for Greek Accounting Standard purposes);
3) The stock purchase rights are granted within 5 years after its formation;
4) The company has not been formed as a result of a merger and
5) The stock acquired through the exercise of the stock purchase right has been disposed at least 36 months after the grant of such purchase right.