Welcome to the March 2025 Share | Updates!
This edition takes you through recent changes in Denmark, Germany, Ireland, Israel, Kenya and UK, while highlighting expected amendments in Australia, Belgium, India, Ireland, the Isle of Man and Slovenia.
These alerts provide a clear and up-to-date snapshot of shifting landscapes that could influence your employee share plans strategies.
Let’s take a look!
Denmark
Supreme Court clarifies application of post-2019 Stock Option Act
In its judgment on 21 February 2025 (case BS-8841/2024-HJR), the Danish Supreme Court confirmed that Awards granted after 1 January 2019 should generally be subject to the Danish Stock Option Act as amended on that date. This overturned a decision of the Maritime and Commercial Court, which had ruled that Awards granted after 1 January 2019 could still be subject to the pre-2019 Danish Stock Option Act where the plan under which the Awards were made had been implemented before 1 January 2019.
This decision is significant in that the pre-2019 Danish Stock Option Act restricted the ability for the terms of Awards to provide for lapse on termination of employment in certain circumstances (with terms in breach of these restrictions being deemed invalid). These restrictions were removed with effect from 1 January 2019.
S|R Note: Although the decision of the Supreme Court is welcome, companies should continue to be cautious when granting options to employees in Denmark under an equity programe that was implemented before 1 January 2019. We recommend seeking local legal advice in these circumstances because the pre-2019 rules in Denmark might materially restrict the company’s ability to apply agreed vesting and leaver provisions.
Germany
Start up tax advantaged plans extended to companies outside Germany
For certain start-up companies (small and medium-sized enterprises), the tax arising on shares awarded to employees for free or at a discounted price may be deferred. This beneficial tax treatment is aimed at start up companies, however, until recently it was limited to circumstances where the shares were in a German employer company. Recent legislation has expanded the availability of the deferral such that shares which are in an overseas parent company outside Germany may now benefit from the deferral (provided the other relevant qualifying criteria are met).
Social Security Increased
Employee Social Security is payable up to a maximum rate of 21.55%, withheld by the Local Company (capped). An additional 0.6% applies to childless employees aged 23 years or older. Employer Social Security is payable up to a maximum rate of 20.95%, payable by the Local Company (capped). The calculation includes the average additional contribution which is raised by each social security provider in its sole discretion.
Ireland
Share Incentive Scheme Reporting Deadline: March 31, 2025
Employers and trustees must report details of share incentive schemes for 2024 by 31 March 2025. Below is a quick guide linking each share plan with its corresponding reporting form:
Restricted Stock Units (RSUs), discounted/free shares, restricted shares, convertible securities, forfeitable/growth/hurdle shares, phantom shares, stock appreciation rights, and other cash-equivalent awards.
Report: Award of shares or cash payments based on share value.
Form: Form ESA (File online via ROS; note that RSU grant reporting is optional).
Share Option Plans
Report: Grant, exercise, assignment, or release of options.
Form: Form RSS1 (File online via ROS).
Key Employee Engagement Programme (‘KEEP’) options
Report: Grant, exercise, assignment, or release of options.
Form: Form KEEP1 (File online via ROS).
Approved Profit Share Schemes (APSS )
Report: All transactions and capital receipts; file a NIL return if no activity.
Form: Form ESS1 (File online via ROS).
Save As You Earn Plans (SAYE)
Report:: Grant and exercise of options; file a NIL return if no activity.
Form: Form SRSO1 (Paper filing).
Employee Share Ownership Trusts
Report: Details of funds received, acquisitions, sales, and transfers of shares; file a NIL return if no activity.
Form: Form ESOT1 (Paper filing).
Additional Notes:
Registration: Employers and trustees must register for share scheme reporting in advance (registration can take about three days).
Other Obligations: These reporting requirements are separate from payroll and trustee declarations for trust income and capital gains.
Non-Compliance: Failure to report can result in compliance interventions, fines, or withdrawal of tax-efficient scheme approval.
Israel
New Legislation and Guidelines on Section 102 Plans
Companies granting Awards to Israeli employees often rely on a beneficial tax route, known as the “102 Capital Gains Route with a Trustee” (the “102 CG Route”), under which more favourable tax treatment can be obtained.
For plans intended to qualify under Section 102 of the Income Tax Ordinance, from 1 January 2025 a detailed questionnaire is required to be submitted via an online system to check that the Plan complies with the legislation accordingly and paper applications will no longer be accepted. There is also a new obligation to file quarterly and annual reports.
There are various conditions which must be met in order to qualify for the 102 CG Route, including a two-year minimum lock up period in which the employee is prevented from selling or releasing the Awards or shares and a requirement for the Awards or shares to be deposited with a qualifying Israeli trustee on the date of allocation to employees. Certain approvals must also be obtained from the Israeli Tax Authorities.
S|R Note: The 102 CG Route requirements are detailed and specific, tax advice should be sought.
Kenia
Social Security Contributions
There has been a change to the social security contributions as of the 1st of February 2025, marking the 3rd phase of the implementation of the NSSF Act of 2013. Both Participant and Local Company are required to pay 6% on pensionable earnings, subject to a cap.
UK
Changes to SAYE Savings Rates
Due to the Bank of England lowering the base interest rate, the bonus rates for “Sharesave” option schemes (SAYE) have been reduced. New rates will apply to any invitations issued on or after 21 February 2025.
3-Year Bonus Rate: Drops from 0.9% to 0.8%.
5-Year Bonus Rate: Drops from 2.7% to 2.3%.
Existing Contracts: Remain unaffected by these changes.
Legal and Tax Changes on the Horizon
Australia
Superannuation on cash awards due to increase to 12% on 1 July 2025
Currently, Superannuation Guarantee is payable up to a maximum rate of 11.5%, payable by the Local Company (capped).
Belgium
Proposal to introduce Capital Gains Tax
On 31 January 2025, the new federal government announced a range of future tax reforms. Included within the reforms is a proposal to introduce a new solidarity contribution on capital gains made on financial assets, including shares. It is anticipated that the tax rate will be 10% and will be levied on annual gains in excess of EUR €10,000. The proposals remain subject to change and the date of implementation is unknown.
India
Tax Reforms announced
In the 2025/2026 Budget, significant changes were announced to the Income Tax regime. While the maximum income tax rates remain unchanged, there are proposals to alter the income tax thresholds, resulting in income up to INR 1,200,000 being subject to zero tax. The threshold for TCS (Tax Collected at Source) under the Liberalised Remittance Scheme will increase to INR 1,000,000 from 1 April 2025.
Ireland
PRSI Rates Increase
Both employee and employer Pay-Related Social Insurance (PRSI) rates will have adjustments as part of a planned series of annual increases set to continue until 1 October 2028. From 1 October 2025, the rates of PRSI (currently – employee 4.1% and employer 11.05%) will increase by 0.1%.
Isle of Man
Income Tax Reduction
The maximum rate of income tax is reduced from 22% to 21%, effective from 6 April 2025.
Slovenia
Social Security contributions increase
Employee Social Security is payable up to a maximum rate of 22.1%, withheld by the Local Company (uncapped). The rate is set to increase to 23.1% on 1 July 2025.
Employer Social Security is payable up to a maximum rate of 16.1%, payable by the Local Company (uncapped). The rate is set to increase to 17.1% on 1 July 2025.