Study On The Fairness Of Tax Burden On Employee Stock Option

In the early 1990s, employee stock option was introduced into China, which had been used by more and more companies. It becomes an important part of employees'income. However, the implementation of employee stock option is influenced by tax policies, which has been proved by practice. At present, there are some loopholes in our tax policies and the related tax burden is unfair. Therefore, we should improve related tax policies.Firstly, this thesis analyzed the utility of employee stock option taxation policy and analyzed the state of tax burden by cases. We found that the unfair of tax burden was shown in three aspects as follows. Different taxpayers pay different amount tax on the same employee stock option. The same taxpayer pays different stock option different tax. The same taxpayer pays the different tax on different tax option incentive mechanism. The direct cause of the unfair is that there are loopholes in the related tax policies while the root cause is that our country implements the classified individual income tax and the unsound taxation system. Compared with other countries and regions, it is concluded that categorized management and appropriate preferential should be adopted in our tax policies of employee stock option.There are three aspects should be considered in the re-organizing of related tax policies, employee stock option tax policies, individual income tax policies and related environment. With the guidance of fairness and efficiency principle, we should make systematic law and adopt categorized management. Our individual income tax policies should be changed to classified and aggregate income tax. Besides, we should take measures to strengthen the consciousness of tax payers. Through the improvement from the above three aspects, we expect the fairness of tax burden would come true.