The Supreme Court limited the right of startup employees to tax benefits

The Supreme Court judges ruled that employees who received company shares as part of remuneration, but have not yet transferred them to themselves, are not entitled to benefit from the preferential tax rate on dividends (15-20%) under the Investment Promotion Law.

According to the IRS, while the shares are held by the trustee, they are subject to a flat rate of 25% because the employee is not considered a shareholder.

Only after full payment of the tax and transfer of shares to the employee does he become a full shareholder with access to all benefits due to investors.

In support of the decision, the court indicated that the employee, unlike the investor, did not invest his own money in the company’s capital and did not participate in raising funds, which means that the incentive for which the investment benefit was created does not work in his case.