Canadian government introduces tax legislation applying to employee stock options granted on or after January 1, 2020

▤ Summary

This is similar to the $100,000 annual cap that applies to incentive stock options under the United States Internal Revenue Code. This definition could create considerable uncertainty for options that have performance-based vesting conditions (such as achieving specified performance or rate of return metrics or completing a liquidity event). The Income Tax Act (Canada) includes a longstanding prohibition on an employer deduction for the option benefit realized by an employee. The proposed Employer Deduction represents a significant change in tax policy but is narrower than we had hoped it would be. Court rejects Ministry of Labour’s attempt to assume breach of OHSA in face of strong safety program

▦ Linked Companies

First Reference

$1M to $5M