Canada stock options taxation

The present tax regime governing employee stock option benefits generally allows employees to defer inclusion of, and deduct options half of, the otherwise taxable benefit relating taxation stock options. The timing of the deferral and criteria to access the deduction depends on whether the corporation issuing the options and underlying shares is a Canadian-controlled private corporation. On November 20,Finance Minister Bill Morneau stated that the Liberal government will not stock retroactive legislation to the current employee stock option tax regime, and that existing stock options should be effectively grandfathered.

To retain or attract valuable employees in and later years, employers should consider alternative employee incentive plans which can be used as a tax-efficient substitute to employee stock options.

Liberal Party of Canada, "The Liberal Fiscal Plan and Costing" current as of 7 Decemberonline: Bloomberg News, "Tax changes taxation apply to existing stock options, Morneau says", The Globe and Mail 20 Novemberonline: The content of this article is intended to provide a general guide to the subject matter.

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