An Employees Guide to Irish Taxes on RSU’s & ESPP’s

Helping you on Life's Financial Journey

Many multinational companies operating in Ireland will operate share schemes enabling employees either purchase shares at a discounted price or receiving them without any direct cost to the employee. However, such acquisitions may trigger a taxable event resulting in employees having to file tax returns to remain tax complaint.

RSU’s: When an employee is awarded shares from their employer without any direct cost, the employer is obliged to account for various taxes on these Restricted Stock Units by selling a quantity of shares on the date of vesting and this process is known as Sell to Cover.. However, employees should also be aware of the potential tax liability at the time of sale of these shares should the shares be sold at a higher value than the market value on the date of vesting.

ESPPs: Where an employer operates an Employee Share Purchase Plan (ESPP), this grants employees the option to purchase shares in their employer company at a discounted price . The purchase is funded through deductions from the employee’s net salary over a period of time and the discount granted is normally 15% of the market value of the shares at the date of granting the ESPP. However, employees should be aware of their individual tax obligations when it comes to the discounted share price as Revenue deem this discount to be a taxable benefit. Employees should also be aware of the potential tax liability at the time of sale of these shares should the share be sold at a higher value than the market value on the date of purchase.

This webinar will provide general guidance on the various Irish taxes applying to employees in receipt of Restricted Stock Units and participants of Employee Share Purchase Plans. We will highlight how to calculate various taxes due, the required Revenue forms, tax payment dates and general tax compliance in respect of these shares. We will also explain how an employee’s tax residency status & domicile impacts on their tax liability. Ample time is allocated for Q&A.