Under U.S. tax laws, cash and non cash compensation is taxable when it becomes vested. As such, individuals are subject to taxation on all of their compensation, regardless of whether it is employee stock, stock options (incentive stock options or non qualified stock options), or a cash bonus plan (collectively known as awards), at the point in time the award is no longer subject to forfeiture.
For individuals who have been issued with a grant of awards while living in one country and that have subsequently migrated to the U.S. they need to determine which country has the primary taxing right (i.e. the source taxing right) (their home country or the U.S.) at the time the award was granted and at the time the award vests.
Without proper planning, individuals are likely to subject themselves to high tax rates and possible double taxation.
Asena Advisors provides global entrepreneurs and executives with tailored, international tax planning that safeguards compensation and alleviates unintended tax consequences.
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We care. Asena’s guiding philosophy is to understand and have empathy with our clients while providing specialist professional tax advice and services. If you need integrated cross border tax advice and compliance our renowned team is able to help you.