Taxation of employment related shares

Restricted Stock Units (RSUs)

An RSU is a grant (or promise) to you by your employer. The grant is that, on completion of a 'vesting period', you will receive either:

  • shares in the company
  • or
  • the cash equivalent of shares.

A vesting period is the period between the date of the grant (or promise) of the shares and the vesting date. The vesting date is the date on which the vesting condition is satisfied. Vesting periods are usually satisfied by:

  • the passage of a stated period of time
  • your individual performance
  • the achievement of corporate goals.

Taxation of RSUs

Share-settled RSUs

You must pay Income Tax (IT)Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) the market value of these shares at the date of vesting.

You will be charged tax on the vesting date or on the date the shares pass to you, if earlier. Your employer will make the necessary deductions through payroll and pay the tax directly to the Collector-General.

RSUs are fully taxable if they vest at a time when you are Irish tax resident. The benefit cannot be apportioned by reference to any part of the vesting period during which you were resident elsewhere.

If you are not tax resident at the time of vesting, then you will not be liable to Irish tax on the benefit.

Cash-settled RSUs

You must pay IT, USC and PRSI on the cash payment received by you. Your employer will make the necessary deductions through payroll and pay the tax directly to the Collector-General.

Capital Gains Tax (CGT)

If you dispose of your shares, you may be liable to CGT. You must report this disposal to Revenue, even if no tax is due. Your employer will not deduct any tax or report the disposal for you.

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