RSUs, stock options and ESPP: how Germany taxes tech compensation

Two tax moments, not one

With RSUs, the value at vesting is generally treated as employment income and taxed through payroll. Any later increase or decrease in value until sale falls under the rules for capital income.

That creates a typical trap: the employer withholds tax at vesting, and the broker statement later shows a cost basis that does not match what Germany already taxed. If you do not correct this in the return, the same value can be taxed twice.

Stock options and ESPP

For stock options, the taxable benefit usually arises on exercise, not on grant. For employee stock purchase plans, the discount compared with market value is generally the taxable benefit.

Special German rules for start-up employee equity can defer taxation in certain cases. Whether they apply depends on the company and the plan terms — that has to be checked individually.

• Keep grant agreements and vesting schedules.
• Download payroll statements showing the equity benefit.
• Keep broker statements with acquisition dates and values.

Moving countries during the vesting period

If you worked in several countries between grant and vesting, the income may be split between them under the relevant double tax treaty. Without that allocation, both countries may tax the full amount.

What matters in practice: document where you worked on which days. Reconstructing this years later is far harder than keeping it now.