Tax 101: Taxation of Equity-Based Compensation and Cross Border Issues

Volume 8 No 1    /    Read Article

By Galia Antebi and Nina Krauthamer

Equity-based compensation has long been a popular way to attract talent and align the interests of corporations and service providers. This type of compensation allows cash-poor companies to attract highly skilled individuals to join the company workforce or its board of directors. With mobility that existed in the pre-pandemic world, noncitizen individuals have moved to the U.S. becoming U.S. tax residents at the time of vesting or exercising conversion rights. Galia Antebi and Nina Krauthamer examine the tax rules in the U.S. Also discussed is the cross-border tax problem that arises when equity based compensation is taxed at different times in the home country and the U.S. and no effective mechanism is available to eliminate double taxation.  See more →