Article
Bavarian Tax Authorities Comment On Tax Treatment Of Employee ‘Hurdle Shares’
The Bavarian State Tax Office has issued groundbreaking guidance on hurdle shares, a specialized employee participation instrument featuring negative liquidation preferences. This ruling addresses critical questions about when and how these shares trigger taxable income, distinguishing between the initial issuance and subsequent disposal of shares. The decree provides clarity on whether proceeds constitute employment income or capital gains, potentially reshaping Germany's startup compensation landscape.
Greenberg Traurig, LLP