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STJ ruled that stock option plans are not considered compensation for personal income tax purposes; taxation will occur only upon the sale of the shares.
The STJ (Superior Court of Justice) concluded on Wednesday (11th) the trial of Special Appeals Nos. 2,069,644 and 2,074,564 (Topic 1226 of Repetitive Cases), which questioned the legal nature of stock option plans for executives to determine the levying of income tax upon such agreements.
The justices held that stock option plans do not have the legal nature of remuneration, so income tax does not apply upon receipt by the individual. Thus, taxation occurs only if and when the shares are sold, and the income tax should be levied on the capital gain, if any.
The publication of the decision is still pending, and there may still be discussions on the modulation of the effects of the decision.
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