No Social Security Tax on Share and Stock Awards in Portugal Beginning 2010

The new Social Security Law of Portugal is approved by the government and will be in force beginning 1 Jan 2010.

According to the new law, taxation of equity awards are as follows:

- Any gains that are based on share awards will be exempt from Portugal social security tax.
- Any gains based on stock awards will be exempt from Portugal social security tax.
- All cash awards will be subject to the social security tax.

In 2009, social tax rates in Portugal are 23.75% for employers and 11% for employees. Beginning 1 January 2010, cash awards referenced above will be subject to social tax at those rates, or the new rates if changed in 2010.

For tax reasons, it is advisable to pull the taxation date of cash awards to a date before 1 January 2010, and stock awards to a date after 1 January 2010 to benefit from the new tax law in Portugal.

Read more about Portuguese Tax.