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How do profit participation rights differ from ESOP, VSOP and GmbH shares?

Complexity, taxes, liquidity and rights compared.

There are several models for employee participation. The table shows how profit participation rights differ from GmbH shares, ESOP and VSOP.

  Profit partici­pation rights GmbH shares ESOP VSOP
Complexity Contract and profit partici­pation right, digital via beel Notarization and commercial register Contract, notary on exercise Contract
Taxes Employment income on creation (timing can be chosen, deferral under § 19a EStG possible), then capital income Employment income on acquisition, even without liquidity (dry income), then capital income Employment income on exercise, then capital income Entire payout as employment income, usually only on exit
Liquidity Transferable, secondary market possible Transferable only via notary Usually not transferable Not transferable
Rights Economically like shareholders from creation, plus put option Like shareholders Like shareholders from exercise Usually exit proceeds only

How taxation works in detail: How is employee participation with profit participation rights taxed?

beel does not provide legal or tax advice. This article is for information purposes only. Tax treatment depends on the individual case. Please consult a tax advisor for specific questions.