Although proposed legislation had provided for the elimination of the tax exemption of EUR 12,000 for gains on equity awards as of January 1, 2015, under the final wording of Law 26/2014, the tax exemption on the first EUR 12,000 remains available. However, effective January 1, 2015, the offer must be made, with the same conditions, to all the employees of the company, company’s group or subgroups. Also, the offer must be made within the general remuneration policy of the company. The Spanish Tax Authorities have clarified in several tax rulings that the offer could be made to a limited group of employees, provided that the criteria to determine such limited group of employees was based in general and objective conditions. The new wording of the Law may prevent the applicability of the EUR 12,000 tax exemption where not all the employees are given the opportunity to participate in the equity compensation plan.
Additionally, a 30% (which had previously been 40%) rebate may be applicable if the period between grant and exercise exceeds two years and the employee has not already applied, within the previous 5 tax years, such 30% rebate to other employment income generated over a two-year period. However, stock options granted before January 1, 2015 are not subject to the 5-year limitation.