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V1764-24 17 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

No employment income if stock options are acquired at market value

An administrator acquires stock options from an international group by paying their market value. The query asks whether exercising them via cash settlement results in a capital gain without the obligation for tax withholding.

The question raised

1.- Whether, at the time of acquiring the options, no remuneration will be generated for the director by paying the market value of the acquired option rights. In the event that the director opts for cash settlement at the time of exercise, whether a capital gain would be obtained and, therefore, whether the consultant will have no obligation to perform withholding tax for Personal Income Tax (IRPF) purposes.

The DGT's ruling

If the beneficiary pays the granting entity the normal market value of the options, no employment income arises. Upon exercising the options through cash settlement, a capital gain is generated from the difference between the transfer value and the acquisition value. This capital gain is not subject to withholding tax for Personal Income Tax (IRPF) purposes according to the Tax Regulations.

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