By 7 votes to 1, the 1st Section of the Superior Court of Justice(STJ), in the recent judgment of Theme 1226, decided that stock option plans offered by companies to employees – stock options – are not remunerative in nature.
In the judgment, assigned to the rite of repetitive appeals (REsp 2.069.644 and REsp 2.074.564), the opinion of the Rapporteur, Justice Sérgio Kukina, prevailed on the commercial nature of stock options. As a result, the individuals/employees must be taxed when the shares are sold, at income tax rates on capital gains of between 15% and 22.5%. In short, the taxable event for income tax does not occur when the stock option is exercised, but when it is subsequently sold.
By a majority, the Justice proposed the following thesis: “In the stock options plan, because it is of a mercantile nature, Personal Income Tax (IRPF) is not levied when the shares are actually acquired from the company granting the purchase option, given that there is no increase in the acquiring option holder’s assets. However, IRPF will be levied when the purchaser resells the shares with a capital gain”.
The STJ’s position is in line with that of the Superior Labor Court (TST), which rules out the remunerative nature of stock option plans.
The absence of a remunerative nature means that the value of the shares is not subject to labor charges and reflexes, such as thirteenth salary, vacation pay and FGTS, for example. In fact, even if the granting of the stock option arises from the employment relationship, the employee’s gain will only occur with the appreciation of the shares, so it cannot be considered as consideration for work.
The alignment of the two spheres of the Judiciary creates an even more favorable environment for the implementation of stock option plans, not only in startups, but in several companies in Brazil.
In brief summary, the decision brings legal certainty to the issue, since it also binds the position of the Administrative Council for Tax Appeals (CARF), which will not be able to issue decisions diverging from the one now consolidated, guaranteeing employees (taxpayers) and employers clearer rules regarding the tax and labor effects of this institute.