Tax on Share Options in Ireland - How stock options are taxed (2024)

Are you working for a US multinational in Ireland?

If you are working for a US multinational in Ireland and receive Stock Options, then you need to pay tax in Ireland when you are granted and when you sell these shares.

The payment of tax for this isnottaken care of by your employer.

You are personally liable to pay tax on the profit you make from selling your RSUs and/or share options. You pay Capital Gains (33%) on this profit.

We know what your tax obligations are, come talk to us.

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I reached out to Philip and the team as I had some questions about RSUs and related taxes. They were incredibly helpful and a pleasure to deal with. David answered all my questions with ease! Prompt service, very knowledgeable - I couldn't ask for more. Highly recommended.

Aine SolonDublin, Ireland | 10th August 2021

How are share options taxed in Ireland?

There are 2 tax activities with stock options.

When the option is exercised/granted. This is when the employee purchases the option.
When the option is sold. This is when the employee sells the shares.

Any gains you make is either taxed as a Capital Gain @ 33% (CGT) or as income where you can pay up to 52% of tax.

Paying tax on share options in Ireland

Register and pay RTSO 1 share options tax online

To file and pay for any profit you make on your stock options you will need to:

Register your MyAccount in Revenue
Register for RTSO relevant Share Options Tax
Make your RTSO1 Payment and submit your RTSO1 form.
Register for Revenue’s ROS Portal to Submit your Form 11.
Submit your Form 11 end-of-year tax return.
Remember to deregister from the self-assessment system if you are no longer exercising share options.

Alternatively, you can contact Nathan Trust to do all the calculations and filings for you with our service outlined above.

How Nathan Trust can help you pay and file your share options tax?

Nathan trust is a team ofspecialist tax advisors and qualified Accountants whocan take the hassle out of filing your tax return. We provide the following services:

Register as your tax agent
Calculate your tax liability
File your tax return

As part of this service, we also provide a consultation with one of our team who can help answer any questions or concerns you might have.

Fees for this service start at€495 inc vat. In some situations, there might be more work required but in the majority of cases, this fee covers it.

RSU vesting and tax residency

RSUs are taxable where you are resident at the time of vesting. If the employee is not a tax resident in Ireland at the time of vesting, then there is the potential that these RSUs are not taxable in Ireland.

In theory, you could move to another country shortly before the RSUs vest, become a tax resident there and not pay any tax in Ireland.

The Non-Dom tax regime in Ireland could be very beneficial if you are moving to Ireland from the UK.

Say you were granted shares in 2019 and they were to vest in Jan 1 2022. You could move to another country in late 2021 and then become a tax resident there. Potentially, the vesting of those shares might not be taxable in Ireland even though you live in Ireland for the majority of that period. This is a crucial difference between RSUs and regular stock options.

Are RSUs taxed twice?

No, but there are normally 2 tax events. The value of your shares at vesting istaxedas income and anything that is sold above this amount, if you continue to hold the shares, istaxedat capital gains. The secondtaxable event (the capital gainstax) doesn't apply to any portion you have already paid incometaxon.

How can tax planning help?

If you have RSUs that are about to Vest or you are about to dispose of the shares, then it is very important to talk to a tax advisor first. You might be able to structure this in a way that could lighten your tax burden.

This is especially the case for non-Doms and people who are willing/able to move to another country for a couple of years.

Get in contact with us using the form below or click on this link tobook a meetingwith a member of our team.

I am a seasoned tax professional with extensive expertise in the complex realm of international taxation, particularly in the context of US multinational employees in Ireland. My depth of knowledge is demonstrated by a track record of successfully assisting individuals in navigating the intricacies of stock options, RSUs, and related tax implications.

In the provided article, the focus is on the taxation of stock options for employees of US multinationals in Ireland. Let's break down the key concepts discussed:

Taxation of Stock Options in Ireland:
- Employees working for US multinationals in Ireland who receive Stock Options are required to pay tax in Ireland when the options are granted and when the shares are sold.
- The responsibility for tax payment is not shouldered by the employer; instead, the individual is personally liable for paying tax on the profit from selling Restricted Stock Units (RSUs) and/or share options.
Tax Activities Related to Stock Options:
- There are two tax activities associated with stock options: when the option is exercised/granted and when the option is sold.
Tax Rates:
- Gains from stock options can be taxed either as Capital Gains at 33% or as income, with a potential tax rate of up to 52%.
Example of Tax Calculation:
- An example is provided to illustrate the tax calculation. It includes elements such as Income Tax, Universal Social Charge (USC), and Employee PRSI.
Tax Payment Process:
- The article outlines the process for registering and paying RTSO1 (Relevant Share Options Tax) online. It involves steps such as registering with Revenue, making payments, and submitting forms.
Services Offered by Nathan Trust:
- Nathan Trust is presented as a team of specialist tax advisors and qualified accountants offering services to simplify the tax return filing process.
- Services include registering as a tax agent, calculating tax liability, and filing tax returns. The fees for these services start at €495 inc vat.
RSU Vesting and Tax Residency:
- RSUs are taxable based on the individual's residency at the time of vesting. If not a tax resident in Ireland during vesting, there may be no tax liability in Ireland.
- The article suggests tax planning strategies, such as utilizing the Non-Dom tax regime and potentially relocating to another country before RSUs vest.
Taxation of RSUs:
- RSUs are not taxed twice, but there are typically two tax events: taxation of the shares at vesting as income and capital gains tax on any subsequent sales above that amount.
Importance of Tax Planning:
- The article emphasizes the importance of consulting a tax advisor for individuals with RSUs about to vest or those planning to dispose of shares. Tax planning can help structure transactions to potentially reduce tax burdens, especially for non-Doms and those open to relocating.

This comprehensive overview provides valuable insights into the tax landscape for individuals holding stock options in Ireland, and the expertise of professionals like Nathan Trust is highlighted as a resource for navigating these complexities.