As taxation policy seeks to recognise substance over form, it is important to view ESOPs as a whole at the international level, in the same way as they are generally given special treatment at the national level. The problem will become more acute as the labour market becomes more mobile. Increasingly, ESOPs are used to reward senior executives. As long as they fall within the favourable or particular treatment given to ESOPs in most jurisdictions, there is scope for significant double or non-taxation.
Khincha, H Padamchand
"Taxation of Employee Stock Option Plans : International Principles,"
Revenue Law Journal:
1, Article 9.
Available at: http://epublications.bond.edu.au/rlj/vol12/iss1/9