RSUs in Spain. Spanish law has no figure called an RSU. Your tax comes from three places at once: what the plan says, where you were resident while it vested, and what you did with the shares afterwards. Change one of the three and the answer changes, sometimes by a lot of money.
The underlying difference is that one of them has to be bought
They get filed in the same drawer — I was given equity — and they are two different things. A stock option is the right to buy shares at a price fixed in advance, the exercise price. An RSU, a restricted stock unit, is a promise to deliver you shares once the conditions are met, without you putting up a euro.
Everything else follows. An option is only worth something if the share rises above the exercise price: below it, the option is underwater and worth nothing. An RSU is always worth whatever the share is worth on the day it is delivered, even if the company has lost half its value since it was promised. Less ceiling, less floor.
It is worth saying early: Spain has no dedicated statute on share-based pay to organise this. There is a contract, usually an American one, and a personal income tax code that did not anticipate it. All of the work consists in translating one into the other.
The two instruments, side by side
| Stock options | RSUs | |
|---|---|---|
| What you are given | The right to buy at a fixed price | A promise to deliver shares |
| What you pay | The exercise price, out of your own pocket | Nothing |
| When the income arises | On exercise: the difference between the share value and what you pay is employment income in kind (article 17.1) | On delivery: the whole value is employment income in kind |
| If the share falls | You do not exercise and lose nothing but the expectation | You get less, but you get something |
| Ceiling | The entire run above the exercise price | The share price, with no gearing |
| How much you must believe | A great deal: with no rise there is nothing | Less: it is enough that the share exists and is worth something |
| When you leave | A short window usually opens to exercise what has vested, and after that it is lost | Unvested units are lost; what has been delivered is already yours |
When each one makes sense
- Options, in young companies. If the exercise price was set when the company was worth little, every euro of subsequent growth is yours. That is the whole logic of early stage: high risk, long run.
- RSUs, in mature or already listed companies. Nobody wants options over a share already trading at its price: the RSU is deferred pay with a value that can be calculated and sold.
- Options, if you already have liquidity to exercise and to pay the tax, and can wait years without touching that money.
- RSUs, if equity is part of your salary and you are counting on it. They demand no decisions and no outlay, and they come with their own mechanism for selling to pay the tax.
What nobody tells you about exercising in a private company
This is the point that costs the most money, and it almost never appears in the grant letter. On the day you exercise in an unlisted company, three things happen at once: you pay the exercise price, you are taxed on the difference between the share value and what you paid, as employment income, and you cannot sell anything to finance either of the two, because there is no market.
An example that shows the shape of the problem rather than a threshold: 20,000 options with an exercise price of 0.50 € and a share value of 5 €. You lay out 10,000 € and declare 90,000 € of employment income, which stacks on top of your salary for the year and is taxed at your marginal rate. With shares you cannot sell.
And if three years later the company shuts down, the loss is a capital loss, which offsets against capital gains and, within tight limits, against investment income. It does not give you back the tax you paid on employment income. That asymmetry is real, and it is why exercising for the sake of it ahead of a liquidity event is almost always a bad idea.
With RSUs the cash problem solves itself, through sell to cover: the company sells, in the same movement, enough of the shares to cover the withholding and delivers you the rest. It is expensive in shares, but it never leaves you with a tax bill and no money to pay it with.
The first is the timing rule in article 14: income is attributed when it becomes due, not when the plan was granted nor when you sell. The second is the reduction for income generated over more than two years in article 18.2, which may apply to what is received on exercise where the generation period allows and the conditions and caps are met — and those are strict and are looked at case by case. Neither applies automatically: both have to be documented.
The income is apportioned between states according to where the work was performed while the right was being earned, not according to where you live on the day of exercise. That means reconstructing your employment calendar, reading the relevant treaty and checking what the other country withheld and whether it is creditable here. We warn about the risk and quantify it; we do not advise on foreign law and we do not guarantee the other state will accept the split.
The in-between case: stock options or RSUs: what actually separates them
A good part of what reaches us is neither a classic option nor an RSU over a listed share. They are in-between instruments, and each one breaks the comparison at a different point.
- The double-trigger RSU in a private company. It vests with time, but it is only delivered if a liquidity event also occurs: a sale of the company or a flotation. While that second switch has not flipped there is no delivery and therefore no income to bring into charge. When it does flip, everything accumulated over years is delivered at once and the income concentrates into a single tax year. It is the pattern that sits worst inside a tax designed around annual income.
- Phantom shares and share appreciation rights. They deliver no shares: they pay the difference in value in cash. What you receive is cash remuneration, with withholding through the payroll, and there is no later capital gain because you never owned anything. A good many people who believe they hold equity hold this.
- Options settled net, with no payment and no delivery. The cash problem of the exercise year disappears — and so does the second stage of taxation as a gain: all of it stays on the employment income side.
- The mixed package. Standard in companies that have grown: old cheap options and recent RSUs living inside the same person, on calendars that do not speak to each other. At that point the decision is no longer which one you prefer, but in what order and in which tax year you touch each of them.
And one that has become ordinary rather than exotic: the employee who is engaged through an employer of record while the equity is granted by the parent company abroad. The payroll and the grant come from two different entities in two different countries, which decides who withholds, what appears on your Spanish payroll documentation and what does not appear anywhere at all until you declare it.
What to look at before you sign or exercise
The inputs needed to put a number on the table, and which are almost never all in the same email:
- The grant date and the vesting schedule, with the initial cliff and the frequency afterwards.
- The exercise price and the reference valuation of the share at the moment you are deciding, together with the document that valuation comes from.
- The window to exercise after leaving the company, and the exact event it is counted from.
- Whether there is a liquidity condition, and how it is drafted.
- Which entity grants and which entity pays your salary, because that decides who withholds.
- Where you worked during the vesting period, month by month, if more than one country was involved.
- What money you intend to pay the exercise and that year's tax with, which is the question that actually decides it.
How we handle stock options or RSUs: what actually separates them
We ask for the documents, not the label: the grant letter, the plan and any liquidity or buy-back agreement. From those come the dates that matter — grant, vesting, exercise or delivery, sale — and with them the year in which each item of income arises and how much it is. Then the calendar: what to exercise, when, and with what money, and what happens if nothing is done at all.
If the distinction worrying you is the acronym on the front of the plan, we deal with that separately on ISO or NSO. Everything else is on stock options and RSUs, and the form asks for the documents, because without them there is no calculation to be made.