§19a EStG — Deferred taxation of employee equity
Deferred taxation of employee stock and option grants: the "dry income" problem is mitigated by deferring taxation until a liquidity event — sale, IPO, or termination (at the latest 15 years after grant). Improved by the Zukunftsfinanzierungsgesetz 2023, but still less competitive than US, Dutch, or Swiss equity taxation.
Key parameters
| Deferral trigger | Sale, IPO, or end of employment; max 15 years |
|---|---|
| Scope | Employee stock and option grants in qualifying companies |
| Competitiveness | Better than pre-2021, below US/NL/CH benchmarks Relevant when relocating equity-compensated design teams |
Eligibility
- HQ
- Any headquarters country
- Local presence
- Local tax presence required (branch is sufficient) A branch office (Zweigniederlassung/permanent establishment) of your existing company is enough — you do not need to form a new legal entity such as a GmbH or BV.
- R&D substance
- Not required
- Company size
- No size restriction
- Models
- All
- Sectors
- All
- Goals
- Additional design site in Europe
Company size and age thresholds apply (expanded in 2023 to broadly double the SME definition, companies up to 20 years old). Group-level grants (from a foreign parent) were brought into scope by the ZuFinG for group companies meeting the thresholds.
Mechanism & application
Rule-based entitlement — Legal entitlement — self-assessment, no case-by-case funding decision.
Applied by the employer through payroll; deferral requires employee consent. No application to an authority.
Timeline: Immediate (payroll)
Legal basis & sources
- Legal basis
- §19a EStG, as amended by Zukunftsfinanzierungsgesetz 2023
- Verification
- EStG consolidated text / ZuFinG (BGBl. 2023)
Changelog
-
14 Dec 2023
Zukunftsfinanzierungsgesetz: thresholds expanded, deferral horizon extended to 15 years, group grants included.
Source: BGBl. 2023 I Nr. 354
Related
✓ Stacks with