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Home / Tolley's Global Mobility: Employment Taxes (Worldwide excluding Europe) / China / 3. Payroll and particular aspects of employee remuneration / 3.2 Employee stock-based incentive income

3.2 Employee stock-based incentive income

Commentary

3.2 Employee stock-based incentive income | China


China

There are different types of stock-based incentive plan for employees we have seen in China and typical plans we are aware of include:

  1. Ìý

    •ÌýÌýÌýÌý Stock Option Plan (SOP)

  2. Ìý

    •ÌýÌýÌýÌý Employee Stock Purchase Plan (ESPP)

  3. Ìý

    •ÌýÌýÌýÌý Stock Appreciation Rights (SARs), and

  4. Ìý

    •ÌýÌýÌýÌý Restricted Stock (RS), etc

In accordance with the current PRC IIT regulations, SOP and SARs shall be taxed at the time of exercise while RS shall be taxed at the time of vesting. As for ESPP, the company will generally match up with the employee's contribution and assist them to purchase designated stocks. The taxable income of ESPP is taxed at the date the contribution is matched up by the company.

Chinese employees are subject

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Web page updated on 28 Aug 2024 12:02