The tax concession for employees receiving shares in their company is being extended retroactively to cover more cases.
What is changing
The new rule extends the scope of the tax concession for employee equity participation to include the transfer of shares in group companies.
As a result, non-cash benefits from equity participation can now be taxed on a deferred basis not only when shares in the employer's company are transferred, but also when shares in affiliated companies are transferred.
However, a share in a group company can only be transferred on a tax-privileged basis if
- the threshold values of § 19a Abs. 3 EStG are not exceeded with respect to all group companies as a whole, and
- the incorporation of no group company dates back more than 20 years.
Entry into force
This applies retroactively from the 2024 assessment period.
Frequently asked questions
Frequently asked questions
What is the extension regarding the tax benefit for employee shareholdings under § 19a EStG?
The deferred taxation of the non-cash benefit from equity participations no longer applies only to shares in the employer's company, but also to shares in affiliated group companies. As a result, employees can also receive tax-privileged participations when shares of another group company are transferred to them.
What requirements apply to the tax-privileged transfer of group shares under § 19a EStG?
The thresholds of § 19a Abs. 3 EStG must not be exceeded with respect to the totality of all group companies. In addition, the formation of none of the group companies may date back more than 20 years.
From when does the extension of § 19a EStG to group company shares apply?
The rule applies retroactively as of the 2024 assessment period. It can therefore be applied to qualifying share transfers from the beginning of that assessment period onward.
What does deferred taxation of employee equity participations mean?
The non-cash benefit arising from the free or discounted transfer of company shares is not taxed at the time of transfer. Taxation is deferred to a later point, such as the sale of the shares, termination of employment, or expiry of a statutory time limit.