International Equity Compensation: U.S. and Foreign Tax Implications of Granting Awards to Mobile Employees

The U.S. rules for taxing equity-based compensation for U.S. citizens are complex. Determining the taxation of incentive stock options, restricted stock units, nonqualified stock options, phantom stock plans, and the many other types of pay by way of ownership interests is difficult enough. Worldwide differences in the taxation of this income add another layer of complexity to these determinations.

Nuances such as where taxpayers reside when compensation is earned, where they reside when it is withdrawn, and whether they were, and are, a U.S. resident or nonresident influence the tax planning and ultimate liability in the U.S. and abroad. Some countries tax equity grants when awarded, while others require withholding and taxation of the receipt when the grant is vested or exercised. Foreigners receiving equity grants from a U.S. company could later be liable for U.S. tax while a resident of another country. Multinational tax advisers must understand the taxation of equity-based compensation arrangements in the U.S. and abroad.

Listen as our international tax expert explains the taxation of typical equity compensation vehicles in the U.S. and overseas for international tax practitioners and employees.

1. International equity compensation: introduction
2. Types of equity compensation
3. Taxation of equity compensation
   1. In the U.S.
   2. Abroad
4. Relocation considerations

The panel will cover these and other critical issues:

• Typical equity compensation vehicles available under the U.S. tax code
• Basic rules related to taxation of equity compensation in the U.S.
• Examples of comparable equity compensation vehicles in other countries and taxation
• Foreign implications upon granting equity compensation to an internationally mobile employee

Learning Objectives

After completing this course, you will be able to:

• Identify types of equity compensation programs
• Determine U.S. tax implications upon granting equity compensation to an internationally mobile employee
• Decide foreign tax implications to granting equity compensation to an executive located in specific foreign countries
• Ascertain key planning considerations surrounding equity compensation plans

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).