Is withholding required when employees exercise their stock options?
Yes, for employees that exercise their stock options after 2010, the budget proposes to clarify that the employer will be required to withhold and remit an amount in respect of the taxable stock option benefit (net of any stock option deduction) to the same extent as if the amount of the benefit had been paid as an employee bonus. In addition, for employee stock option benefits arising on the acquisition of shares after 2010, the budget proposes that the fact that the benefit arose from these acquisitions not be considered a basis on which the Minister of National Revenue may reduce withholding requirements. 6. Will these proposals apply if there are restrictions on the disposition of the shares acquired under the stock option agreement? The above proposals will not apply in respect of options granted before 2011, pursuant to an agreement in writing entered into before 4:00 p.m. Eastern Standard Time on March 4, 2010, where the agreement included, at that time, a written condition that
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