Stock option

      -Taxation for employee whoreceived stock from company-

                                                                 Written by HyunWoo, Yang.

                                                                 30^thDec 2016.

1.Definition of stock option and types

 (1) Definition

   Employee can be given his/her own company'sstock.

 (2) Types

  1) Giving company's stock : giving a employeecompany's stock already issued.  

  2)Issuing new stock and give it : Issue new stock and then give it to employee.

  3) Calculating difference : giving money orstock after calculating actual amount and dealing amount of stock.

2. Limitationand object of stock option

 (1) Granting party (Commercial law 340-2)

    Granting party: company's employee.

    According to the venture law 16-3 and samelaw decree 11-3, not

only companyemployee but also other expert or others can be given stock by venture company.

   1) Employee of university, researcher …

   2) Lawyer, accountant, tax accountant,doctor …

 3) University.

 4) Company employee taken by venture company.

(2) Party whocan not be granted. (Commercial law 340-2)

 1) Stockholder : having 10/100 of issuedstock.

 2) The party who has power to hire or firedirector, committee of inspection …..

 3) Spouse, lineal and direct descendant of(1),(2).

(3) Limitation(Commercial law 340-2)

 · 10% of issued stock

• Unlisted venture company:50/100

• Listed company : 15/100

3.Taxation

 (1) employee : It is earned income. he/sheshould file withholding tax.

    (earned income law 38-①-17)

 (2) Resigned employee : It is other income. He/sheshould tax on it.

    (necessary expense is not admitted).

 (3) Non resident.

 No tax. If he/she try to sell the stock givenuntil 31^st/Dec/2017, he/she should submit application form of incometax exemption to the company. Company should file withholding tax and submit “status of exercise for stock selling option” to the tax office.