RSUs in Spain. In Spain an RSU is not a legal category: it is a contractual promise to which rules written for something else are applied. The characterisation comes out of your plan document, not out of the name of the instrument, and that is where two colleagues with the same grant end up with two different returns.
Julia Novak is Czech, has lived in Alicante since 2021 and is chief operating officer of an unlisted Spanish solar energy company with two hundred employees. The company offers her a choice between two packages over a four-year horizon: 3,000 phantom shares that will pay in cash the full value of a share at the end of the period, or 6,000 options over real shares with an exercise price of 20 €, which is the current estimated value of each share. The finance department tells her they are "economically equivalent". Julia wants to know what happens with each one in her tax return, how much money she would have to put in and what happens if things go badly.
The underlying difference
With phantom shares, Julia has a claim against the company: at the end she will be paid money calculated on the value of the share. With options, she has a right to buy shares at a fixed price: if she exercises, she becomes a shareholder. Everything else follows from that difference. The individual explanations are in how phantom shares are taxed and in when my stock options are taxed.
| Criterion | Phantom shares | Stock options |
|---|---|---|
| Julia's outlay | None | The exercise price, 120,000 € for the 6,000 |
| What she receives at the end | Money | Shares in an unlisted company |
| Employment income | Cash, when payable | In kind, on exercise |
| Withholding | Withholding on the payment | Payment on account on the spread |
| Later gain | None | Yes, on selling the shares, in the savings base |
| Exemption for share awards | Not available | May be available, subject to requirements |
| 30 % reduction | May be available | May be available |
Three scenarios four years out
We compare the two packages at three possible values of the share at the end of the period. We assume Julia exercises the options at exactly that point and, for simplicity, that she can sell the shares at that price.
The share is worth 35 €:
- Phantom: 3,000 × 35 = 105,000 € in cash, all of it employment income.
- Options: spread of 6,000 × (35 − 20) = 90,000 € of employment income. Julia pays 120,000 € and receives shares worth 210,000 €.
The share is worth 20 €:
- Phantom: 3,000 × 20 = 60,000 €, employment income.
- Options: zero spread. There is no income, she does not exercise and she receives nothing.
The share is worth 12 €:
- Phantom: 3,000 × 12 = 36,000 €, employment income.
- Options: worthless. She does not exercise and receives nothing.
| Final value of the share | Phantom shares | Options |
|---|---|---|
| 35 € | 105,000 € | 90,000 € of spread |
| 20 € | 60,000 € | 0 € |
| 12 € | 36,000 € | 0 € |
The claim that they are "economically equivalent" only holds at some point in between. Full-value phantom shares pay something even if the company does not grow; options only pay if it grows. Options have more upside if the company takes off, because there are twice as many units.
There is also a cash difference the table does not show. In the 35 € scenario, the phantom shares put 105,000 € into Julia's account, from which the company will already have withheld a part. With the options, Julia has to pay 120,000 € to exercise and, on top of that, the income tax on 90,000 € of base, before she has sold anything. If the company is still unlisted and there is no buyer for her shares, she will have to fund both out of her own money.
When each one is taxed
With phantom shares, Julia has no choice: the income is allocated when the payment becomes payable under the plan. With options, within the exercise window, she can choose the year, which lets her, for example, exercise in a year of lower income. In exchange, if she exercises and keeps shares she cannot sell, she will have paid tax on income in kind that has not turned into money, a risk we analyse in exercise now or wait.
The base in which each euro is taxed
Everything she receives from the phantom shares goes to the general base as employment income. With the options, the spread on exercise goes to the general base, but whatever the shares gain after exercise will be a capital gain in the savings base when she sells. If Julia exercises at 35 € and the company is sold two years later at 50 €, those additional 15 € per share, 90,000 € in total, will be taxed in the savings base, with a different scale.
Tax reliefs that only one of the two has
The exemption in article 42.3.f) of the Spanish Income Tax Act, of up to 12,000 € a year, refers to the delivery of shares to employees free or below market price, and requires, among other conditions, that the offer be made on the same terms to all employees. Phantom shares can never qualify, because no shares are delivered. Options could, to the extent that the exercise involves a delivery below market price, but only if the plan is offered to the whole workforce on the same terms, something rare in an executive plan like Julia's.
If the company were an emerging company accredited under Law 28/2022, the limit would be 50,000 € and it would not need to be offered to everyone, with special rules on timing and valuation. It only applies to deliveries of shares, not to cash plans. We explain it in equity in a Spanish start-up.
The 30 % reduction for income with a generation period of more than two years applies to both instruments, with the 300,000 € cap and the five-year rule. See the 30 % reduction.
Neither package is better in the abstract. If the company stagnates, phantom shares protect you; if it grows a lot, options yield more and move part of the income into the savings base. Choosing requires a view on the company's future that we cannot give you, and no tax calculation guarantees the outcome.
Questions Julia should ask before signing
- Do the phantom shares pay the full value or only the appreciation? If it is only the rise, they are closer to a SAR, as we explain in how SARs are taxed.
- How is the share valued at the end: a formula in the plan, an independent report or the price of a transaction?
- What happens under each package if she leaves before the four years are up?
- Does the option plan allow exercising and selling at the same time, or will the shares be left without liquidity?
You can send us both proposals through the equity form so that we can compare them with your figures and your regional scale.
The differences between cash plans and share plans are explained on the Salama Tax page on pay in shares, from the point of view of the person who receives them.