One way for a company to improve long-term employee retention and to attract new employees is through an employee share scheme. When setting up these schemes, however, caution is required as there are several tax pitfalls. The focus when companies choose these schemes is often on including employees in decision-making and giving them information, with less attention paid to questions about tax. However, the level of tax burden can significantly influence how attractive an employee share scheme is for both the employer and employee.
In their article, Michael Rupp and Christian Reichert explain the key points for both sides and use an example to show how the tax burden is calculated in Liechtenstein.