Us taxation of foreign stock options
The Delhi Bench of the Income Tax Appellate Tribunal ITAT has delivered an important ruling in the case of Robert Arthur Keltz the taxpayer. The ITAT has held that only a portion of employee stock options would be liable stock tax relatable to the services rendered by the taxpayer in India, and not pertaining to the whole grant period. Taxand India summarises the facts of the case and the ruling of the ITAT. The taxpayer, an employee of United Technologies International Operation, USA, was deputed to its Indian Liaison Office under a tax equalisation policy. Such a policy ensured that the taxpayer didn't pay excess taxes ie over and above the taxes hypo stock that stock would pay had he continued to stay in his home country due to the commencement of international assignment. Further the taxpayer was granted options of options, shares when he was outside India. The stock options had a vesting period of 3 years but were vested partially and exercised by the taxpayer during his Indian assignment. The taxpayer, while filing his return of income, offered to tax the amount of proportionate stock perquisites earned in India. Also, by the virtue of tax stock policy, the taxpayer had excluded the amount options hypo tax from his salary. The Assessing Taxation AO rejected the claim of the taxpayer and brought to tax the entire perquisite value of stock options when the options were exercised while he was in India. Foreign addition, the AO has also added back the amount of hypo tax to the base salary of the taxpayer. The taxpayer brought the case to the Commissioner of Income Tax who upheld his claim. Aggrieved by this the AO filed an appeal before the Delhi ITAT. However the taxpayer stated that the shares were allotted outside India and therefire, the benefit cannot be deemed to be received in India. The Delhi bench of ITAT has ruled in favour of taxation taxpayer holding that since the taxpayer has not rendered services in India for the whole grant period, only such portion of the perquisite value of stock options would be taxable in the hands related to the period of his Indian assignment. New ruling on taxation of foreign options stock options. Your Taxand contact for further queries is: The ruling clearly taxation out taxation principle that the perquisite foreign of stock options would be liable to tax in India to the extent relatable to services rendered in India. This ruling would provide significant relief to several expatriates working in India on assignment, and who may exercise their stock options while on assignment in India. Register to receive your own regular copy of our global newsletter, Taxand's Takepublications and topical updates. Skip to main content. Services We apply our expertise to 9 overarching global tax service areas. Taxand provides quality tax advice across the following continents and countries: Here you can access and share the latest local, regional and global tax knowedge news, newsletter articles and media commentary All News Media Thought leadership. New ruling on foreign of foreign employee stock options Your Taxand contact for further queries is: Sign-up to our Newsletter Register to receive your own regular copy of our global newsletter, Taxand's Takepublications and topical updates Sign up now. Join Taxand on social media. Join the discussion on Twitter Cyprus signs the Multilateral Instrument https: Join the discussion on Linkedin Access informed opinion to understand the impact of tax issues affecting multinationals today. Taxand locations Locations Africa Americas Asia Europe Argentina Australia Austria Belgium Brazil Canada Chile China Colombia Cyprus Denmark Options France Germany Greece India Indonesia Ireland Italy Japan Korea Luxembourg Malaysia Malta Mauritius Mexico Netherlands Norway Peru Philippines Poland Portugal Puerto Rico Romania Russia Singapore South Africa Spain Foreign Switzerland Turkey UK Ukraine USA Venezuela. Taxand services Compensation tax. About Us Overview Approach Values CSR Structure Our Taxand Story Facts Leadership About Taxand Legal. Taxand's Take News Media Thought Leadership. Connect with us People Careers Training. Taxand is a global organisation of tax advisory firms. Each firm in each country is a separate and independent legal entity responsible for delivering client services.
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