Welcome to the May 2025 Share | Updates!
Our partners at CMS have once again done a great job looking into recent global changes and integrating them into our platform. We’re happy to share a few of these updates with you here. This edition takes you through recent changes in Argentina, with proposed changes in Brazil, Canada, Lithuania, Netherlands and UK.
We’re excited to highlight a valuable feature of our platform: Periodical Reminders. Whether it’s for annual returns, statements, reports, notifications, or filings, this tool keeps you on track. You’ll get a preview in this month’s newsletter. Let us know if you find it helpful, and if you’d like to receive more updates like this!
GEO Roundup – As the annual Global Equity Organization conference recently completed in the beautiful city of Prague, we share some of our team’s reflections from these days.
Key aspects of launching employee incentives plans in CEE – explore this guide to equity incentives across Central and Eastern Europe, prepared by our CMS colleagues for 7 jurisdictions.
Mike Pewton Applies for GEO Board Membership – With 30+ years in global equities, he brings expertise, energy, and a passion for advancing equity compensation best practices. Check the link below, to read his statement and cast your vote before the 4th of June.
Let’s dive in!
Recent Changes
Argentina
Relaxation of Foreign Exchange Rules
Previously a USD 200 limit had been set on the transfer of monies outside Argentina (for example, in connection with the purchase of shares under Awards) which meant that there were difficulties operating Plans which required an outward remittance. This has now been relaxed for individuals and they are now allowed to purchase USD and transfer funds to foreign accounts for share purchases without the previous monthly USD 200 limit.
Therefore, it is now possible to remit funds out of Argentina to purchase foreign shares in case of Employee Stock Purchase Plans (ESPP) or to pay the exercise price of their options (SOP).
However, there has not been a similar relaxation of the exchange control restrictions for local companies, as they continue to be unable to remit contributions on behalf of employees without prior approval from the Argentine Central Bank. If a Local Company makes a payment on behalf of Participants, there may still be restrictions in place.
Further changes are expected later in 2025.
Changes on the Horizon*
Brazil
Proposed Amendment to Income Tax
In March 2025 a bill was presented to the National Congress which includes proposals to reduce the income tax rate to zero for lower paid workers and a discount to tax for mid-paid workers. The proposals include the introduction of a minimum personal income tax for higher earners and imposing income tax on dividends.
If passed, the changes will take effect from 1 January 2026.
Canada
Proposed Middle-class Tax Relief
Ottawa Canada proposed a large personal income tax decrease as one of the government’s main legislative goals for the next parliamentary session after announcing a new cabinet.
On July 1, 2025, the lowest marginal personal income tax rate will be lowered from 15% to 14% when legislation is passed.
Lithuania
Proposed Personal Income Tax Changes
The Lithuanian government is proposing changes to the personal income tax system, introducing a progressive tax structure based on total annual income (excluding income from distributed profits):
- Up to 36 average salaries (~€75,920): taxed at 20%
- €75,920–€126,533 (36–60 avg. salaries): taxed at 25%
- €126,533–€253,066 (60–120 avg. salaries): taxed at 32%
Above €253,066 (over 120 avg. salaries): initially proposed to be taxed at 36%, but this rate may be dropped following political opposition; likely maximum rate will be 32%.
Currently, personal income tax in Lithuania is applied at a rate of 20% on annual income up to €126,532, and 32% on any income exceeding that amount.
The proposal is still under discussion and may be adjusted.
Netherlands
Proposed Tax Advantaged Stock Options for Start-ups and Scale-ups
In its Spring Memorandum published on 18 April 2025, the Dutch Government has proposed a potential new tax-advantaged stock option arrangement for Dutch start-ups. If approved, the new arrangement might be available from 1 January 2027.
Under the proposal, stock options granted by eligible start-up and scale-up companies will benefit from two key changes to the normal tax regime:
- tax will arise on the ultimate sale of the shares rather than on the exercise of the option or when the shares first become tradable; and
- tax will be paid at an effective tax rate up to a maximum of 32.17% (taxable basis of income from qualifying share options is set at 65%) rather than under normal income tax rates up to 49.5%.
UK
Proposed New Market for Private Companies PISCES
The PISCES initiative, set to be introduced in the UK later this year, aims to create a lightly regulated secondary market for private companies. This market will facilitate periodic trading events using public market infrastructure, but with less stringent disclosure and compliance requirements.
The PISCES initiative provides an opportunity for employees to realise value in the absence of a sale or IPO.
One of the significant aspects of PISCES for employees is its impact on the tax treatment of employee shares and Awards. Shares acquired through PISCES transactions will be classified as readily convertible assets (RCAs), which will require employers to operate PAYE withholding and will also give rise to employee and employer National Insurance contributions. This will also have implications for taxable events relating to other employee shares and Awards. There will also be an impact on share valuations for the purposes of tax advantaged EMI and CSOP plans.
In good news, HMRC has announced on 15th May that tax advantaged options (such as EMI and CSOP) may be exercised in connection with a PISCES window without losing favourable tax treatment.
Further details will be provided as and when announced by the UK government.
* Refer to our previous Share | Updates to see more changes expected on the horizon!
Periodical Reminders
Australia
Employee ESS statements – July 14
The Local Company must provide an employee share scheme statement to Participants in connection with Awards by 14 July ( in respect of the previous financial year).
China
SAFE quarterly
Companies registered with the State Administration of Foreign Exchange (SAFE) in China are required to file their quarterly reports electronically.
India
Annual Performance Report Due – 60 days from 31 March
The Local Company is required to submit its Annual Performance Report (APR) in connection with Awards to Participants in India through an authorised dealer bank for the 6 month period to 31 March. The report must be submitted within 60 days from 31 March.
Saudi Arabia
Notify CMA all offers of Awards made in the preceding quarter – July 10
Companies offering Awards to employees in Saudi Arabia must notify the Capital Market Authority (CMA) within ten days after the end of the quarter following grant disclosing the total number and value of all offers made to employees during the preceding quarter.
UK
ERS annual returns – July 6
The HMRC ERS annual returns are now due and must be filed by 6th July. Please make sure you use the most recent templates available from HMRC for your returns.
Vietnam
Quarterly report to the SBV – July 20
There are quarterly reporting requirements to the SBV using a prescribed form which includes details of the number of grants of Awards made and the number of shares issued under Awards.
GEO Roundup
We’d like to share some of our team’s reflections from the Global Equity Organization Annual Conference 2025 in Prague:
- It’s good to see that incentivising employees with equity based plans continues to be a cornerstone of employee remuneration and increasingly, companies are looking at moving to equity based arrangements in as many jurisdictions as possible rather than opting for an equity plan with cash-based sub-plans for smaller markets.
- The introduction of share plans to incentivise the workforce is moving higher up on the agenda for many European companies reflecting the practice in the UK and USA.
- It’s always great to connect with so many people across the world who are passionate about employee share plans. On the CMS side, we were joined by our Central and Eastern European colleagues. It was interesting to hear from them about share plan developments in CEE countries and we can see that there is a lot going on in these countries.
- Keeping up to date with the legal and tax aspects of share plans in a number of different jurisdictions can be challenging (and expensive!). It was interesting to hear from different companies on the challenges they face such as knowing the withholding obligations in different jurisdictions and when these can arise.
- While we continue to wait for the hoped IPO market bounce back, good advice for private companies would be to make use of the time by getting their share plans in order. A good starting point would be to ask yourself i) do we have the right plans in place to get us to IPO?, ii) are the right people being incentivised at the right level? and iii) can we still introduce tax-advantaged plans?
- Change can take time, particularly when you’re introducing a new equity plan so it’s good to regularly take stock of what plans you have and know where you want to be in the next 3-5 years.
- Employee education is critical when it comes to plan participation for all-employee plans. It’s easy to lose employees if you dive right into the mechanics of a plan first. As lawyers, we often get caught up in the technical stuff, but it was useful to hear from companies who have initiated employee engagement at a much higher level. This can be through explaining why they are doing this, what they hope to achieve and what this means for employees – this is likely to lead to better engagement if employees can see what it means for them from the outset.
Key aspects of launching employee incentives plans in CEE
Our colleagues from CMS have prepared this guide to help companies understand the key aspects of launching employee incentives plans in CEE by bringing together and answering the most frequently asked questions from the clients.
In this guide, the focus is on the two schemes that are found to be the most common in practice: stock options and restricted stock units.
Currently, it covers 7 jurisdictions: Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, and Ukraine.
Explore the guide here.
Mike Pewton Applies for GEO Board Membership
We’re excited to announce that Mike Pewton, our CEO and founder of Share Reporter, has applied to join the Board of Directors at the Global Equity Organization (GEO). With decades of experience in global share plans and a passion for advancing equity compensation practices, Mike’s candidacy represents a strong voice for innovation and international perspective in the GEO community.
You can read Mike’s statement and place your votes here.