Your company's shares: what you pay and what you can save

If your company gives you free shares or lets you buy them at a reduced price, they are taxed as salary, but with exemptions and possible reductions that can significantly lower what you pay.

Who is affected?

• If your company delivers shares or interests to you free of charge → they are taxed as earned income in kind, with a possible exemption of up to €12,000.
• If you have stock options (the right to buy your company's shares at a fixed price) → the difference between market value and the exercise price is taxable, also with a possible exemption.
• If you work at a start-up (an emerging company recognised under Law 28/2022) → the exemption rises to €50,000 and taxation of the excess may be deferred.
• If you received purchase options before 1 January 2015 → a transitional regime with special conditions exists.

Do I have to declare it?

• Has your company delivered shares to you or have you exercised a purchase option?
  • Yes → Does the total value received exceed the applicable exemption?
    • Yes → You must declare the excess as earned income
    • No → Not taxable (within the exempt limit)
  • No → No obligation for this item

What you will need

Before starting, have to hand:

• Company certificate — shows the market value of the shares at the time of delivery or exercise
• Date of grant of the options — to verify the generation period (> 2 years for the 30% reduction)
• Agreed exercise price — in the case of stock options

🔵 Is your company an emerging company? It must be registered as such in the Companies Register or Co-operatives Register in accordance with Law 28/2022, of 21 December, promoting the ecosystem of emerging companies.

Depending on your situation

The tax benefit varies according to the type of company and the instrument used.

🟡 Emerging company stock options: to be entitled to the exemption, the status of emerging company must be met at the time of grant of the option, not when it is exercised.

Key figures

What you need to know

• Two instruments, the same taxation: both free share deliveries and non-transferable stock options are earned income in kind, subject to payment on account.
• The 30% reduction requires a generation period of more than 2 years: the period is counted from the time the right arises (grant of option or start of plan) until it accrues (delivery or exercise).
• The 30% reduction has an additional limit: it cannot be applied if in the 5 preceding tax periods the reduction was already applied to other income with a generation period of more than 2 years.
• The reduction does not apply if the benefit is received as periodic income: if the shares or the payment of the income are structured as an annuity (successive periodic payments), the 30% reduction does not apply.
• Emerging companies allow deferral of taxation: the non-exempt excess is not declared until the shares are listed on a stock exchange, exit the estate or 10 years have elapsed since delivery.
• Valuation for emerging companies: if there was a capital increase in the previous year, the value of the shares subscribed by an independent third party in that increase is used; if not, the market value at the time of delivery.

🟡 Shareholding requirement: each employee, together with their spouse and relatives up to the second degree, may not hold a direct or indirect shareholding in the company exceeding 5 per cent. If this is exceeded, the exemption does not apply.

🔵 Failure to meet the 3-year holding period: if you sell the shares before 3 years have elapsed from delivery, you must file a supplementary self-assessment with the corresponding interest on arrears within the period between the date of non-compliance and the end of the filing deadline for that year.

If the benefit is received as periodic income: the 30% reduction does not apply when the benefit is structured as an annuity (successive periodic payments).

Stock options not exercised: if the employee never exercises the purchase option, there is no income of any type to declare.

Official text

📄 Official source — AEAT · Practical Income Tax Manual 2025 (verbatim reproduction, for information only).

f) Delivery to employees of shares or interests in the company itself or in other group companies

In general

Legislation: Art. 43 Personal Income Tax Regulations

• The delivery to active employees, free of charge or at a price below normal market price, of shares or interests in the company itself or in other companies of the group is exempt from Personal Income Tax, for the part that does not exceed, for all shares delivered to each employee, €12,000 per year, provided the offer is made on the same terms for all employees of the company, group or sub-group of companies.

• In the case where the company in which the employee works forms part of a group of companies meeting the conditions set out in Article 42 of the Commercial Code, the beneficiaries may be employees of the companies forming part of the same group, subject to the following conditions:

1. Where shares or interests in a group company are delivered, the beneficiaries may be employees of the companies forming part of the same sub-group.
2. Where shares or interests in the parent company of the group are delivered, the beneficiaries may be employees of any company in the group.

• In both cases, the delivery may be made both by the company in which the employee works and by another company belonging to the group or by the public body, state company or Public Administration holding the shares.

• For the delivery of the aforementioned shares or interests to be exempt as a benefit in kind, the following additional requirements must also be met:

• The offer must be made on the same terms for all employees of the company and must contribute to their participation in the company. In the case of groups or sub-groups of companies, the said requirement must be met in the company for which the employee receiving the shares works. However, this requirement shall not be deemed to be breached where employees are required to have a minimum period of service to receive the shares or interests, provided that the same period applies to all of them, or that they are taxpayers under Personal Income Tax.
• Each employee, together with their spouses or relatives up to the second degree, must not hold, directly or indirectly, a shareholding in the company where they work or in any other group company, exceeding 5 per cent.
• The securities must be held for at least three years.

Regarding the three-year holding period, note that it is counted from the delivery of the shares or interests. Also note that periods set by years are calculated date-to-date, in accordance with Articles 5.1 of the Civil Code and 30.4 of the Law on Common Administrative Procedure.

Failure to comply with this period will give rise to the obligation on the part of the employee to file a supplementary self-assessment, with the corresponding interest on arrears, within the period between the date of non-compliance and the end of the regulatory filing deadline for the tax period in which the non-compliance occurs.

Valuation:

The acquisition value of shares delivered to the employee that were exempt earned income in kind, for the purposes of calculating the capital gain obtained on their subsequent sale, shall be the same as if the delivery had been taxed as earned income in kind, which in both cases is the normal market value of the shares at the time of their delivery — in the case of listed company shares, their quoted value.

Special feature: delivery of shares or interests to employees of emerging companies

The delivery of shares or interests granted to employees of an emerging company within the meaning of Law 28/2022, of 21 December, promoting the ecosystem of emerging companies, presents the following special features.

• The exemption, for all shares delivered to each employee, will be €50,000 per year. • It will not be necessary for the offer to be made on the same terms for all employees, but it must be made within the general remuneration policy of the company and must contribute to the participation of employees in it. • In the case where the delivery of shares or interests arises from the exercise of purchase options over shares or interests previously granted to employees by the emerging company, the requirements for classification as an emerging company must be met at the time of grant of the option.

Temporal attribution of the non-exempt amount

A special attribution rule is established for earned income in kind derived from the delivery of shares or interests in an emerging company that, while meeting the required conditions, are not exempt because they exceed €50,000 per year for all shares delivered to each employee.

Legislation: Art. 14.2 m) Personal Income Tax Law

Earned income in kind derived from the delivery of shares or interests in an emerging company within the meaning of Law 28/2022, of 21 December, promoting the ecosystem of emerging companies, that, while meeting the conditions set out in Article 42.3.f) of the Personal Income Tax Law, are not exempt by exceeding the amount provided in that article, shall be attributed in the tax period in which any of the following circumstances occurs:

• The company's capital is admitted for trading on a stock exchange or on any multilateral trading facility, Spanish or foreign. • The share or interest in question exits the taxpayer's estate.

However, if a period of ten years from the delivery of the shares or interests elapses without any of the aforementioned circumstances occurring, the taxpayer must attribute the earned income referred to in this paragraph to those shares or interests in the tax period in which the said ten-year period has elapsed.

A) Reduction for income with a generation period of more than two years (extract relating to stock options)

Legislation: Art. 18.2 Personal Income Tax Law

Note: these reductions shall not apply where the benefit is received in the form of an annuity.

A reduction of 30 per cent of the amount of gross income shall apply where all of the following conditions are met:

• That the income constitutes gross income other than that provided for in Article 17.2.a) of the Personal Income Tax Law. Note: the reduction provided for in paragraph 3 of Article 18 of the Personal Income Tax Law applies to income provided for in Article 17.2.a) of the Personal Income Tax Law. • That the income has a generation period of more than two years. The generation period of the income is to be understood as the time elapsed from the beginning of the existence of the right to receive the income until it materialises, when the income accrues. The generation period thus understood must exceed two years, calculated date-to-date. • That the income is attributed in a single tax period. • That in the five preceding tax periods in which they become due, the taxpayer has not obtained other income with a generation period of more than two years to which the reduction was applied.

Transitional regime — For income deriving from the exercise of purchase options over shares or interests by employees granted before 1 January 2015.

Legislation: Twenty-fifth Transitional Provision Personal Income Tax Law

In the case of earned income deriving from the exercise of purchase options over shares or interests by employees that were granted before 1 January 2015 and are exercised more than two years after their grant, if, additionally, they were not granted on an annual basis, this reduction of 30 per cent may be applied, even if in the five preceding tax periods in which they are exercised, the taxpayer has obtained other income with a generation period of more than two years to which the reduction was applied.

4.2. For income deriving from the exercise of purchase options over shares or interests by employees granted before 1 January 2015

In this case (earned income deriving from all purchase options granted before 1 January 2015), without prejudice to the annual combined limit (€300,000), the limit provided for in Article 18.2.b) 1º of the Personal Income Tax Law in the wording in force on 31 December 2014 shall apply.

That limit consisted of the income on which the reduction was applied not exceeding the amount resulting from multiplying the annual average salary of all Personal Income Tax declarants — which shall be €22,100 — by the number of years of generation of the income.

This limit was doubled when the income met the following requirements:

1. The shares or interests acquired were held for at least three years from the exercise of the purchase option.
2. The purchase option offer was made on the same terms for all employees of the company, group or sub-group of companies.

Frequently asked questions

What is the difference between free shares and stock options?

With free shares the company delivers the shares directly to you; the earned income is the market value of the shares at the time of delivery. With stock options (non-transferable options), the company grants you the right to buy shares at a fixed price; the earned income is the difference between the market value of the shares when you exercise the option and the price you pay for them. In both cases they are taxed as a benefit in kind and may benefit from the same exemption.

Can I apply the 30% reduction to my stock options?

Yes, provided the generation period exceeds two years (from grant to exercise), the income is attributed in a single tax period and you have not applied this reduction to other irregular income in the 5 preceding years. The maximum amount on which the reduction applies is €300,000 per year. If the options were granted before 1 January 2015, a more favourable transitional regime exists that allows it to be applied even if you have already used it in previous years.

I work at a start-up: when do I declare the non-exempt excess of my shares?

If your company has the status of an emerging company under Law 28/2022, the excess above €50,000 is not declared when the shares are delivered to you, but when the earliest of the following three circumstances occurs: the company is listed on a stock exchange, you sell or lose the shares, or 10 years elapse from delivery without either of the above occurring.

What happens if I sell my shares before the 3 years?

If you sell the shares before 3 years have elapsed from delivery, you breach the holding requirement and lose the exemption. You must file a supplementary self-assessment including the amount that was exempt, together with the corresponding interest on arrears. The deadline for filing runs from the date of non-compliance until the end of the return filing period for the year in which it occurs.

Legislation

• Art. 42.3.f) Personal Income Tax Law — Exemption for delivery of shares or interests to employees
• Art. 43 Personal Income Tax Regulations — Valuation rules for benefits in kind
• Art. 43.1.1º g) Personal Income Tax Law — Special valuation of shares in emerging companies
• Art. 18.2 Personal Income Tax Law — 30% reduction for income with a generation period of more than 2 years
• Art. 18.2.b) 1º Personal Income Tax Law — Special limit for options granted before 1-1-2015
• Art. 14.2.m) Personal Income Tax Law — Deferred temporal attribution for shares in emerging companies
• Twenty-fifth Transitional Provision Personal Income Tax Law — Transitional regime for options granted before 1-1-2015
• Seventeenth Transitional Provision Personal Income Tax Regulations — Failure to comply with holding period in general stock option plans
• Law 28/2022, of 21 December — Promoting the ecosystem of emerging companies