Supreme Court Ruling Affects the Unterstanding of Equity Incentive Plans in Denmark
04.07.2025
In February 2025, the Danish Supreme Court issued a landmark ruling on how unvested options awarded as part of an equity incentive plan for employees shall be handled upon termination following significant legislative changes in 2019. The Supreme Court followed the arguments presented by ECOVIS Legal Denmark on behalf of a multinational company enabling companies to potentially avoid payments of unvested options (may cover various different kind of shares) to employees, who leave the company.
Introduction to the Case and Legal Framework
During their employment, two employees had been offered participation in an equity incentive plan under which they would either be awarded Restricted Stock Units or offered to purchase a share once the option had vested. Vesting was subject to the employees still being employed on specific vesting dates stated in the offer of participation, and any unvested options
would lapse upon termination.
The two employees were offered participation both before and after 1 January 2019. This is significant as a revised version of the Danish Stock Option Act (SOA) came into effect on that date. However, the transition rules from the SOA applicable prior to January 1, 2019 (2004 SOA) and the revised version (2019 SOA) were unclear, resulting in a lack of clarity as to which set of rules applied to their equity incentive plans.
The significance of whether the 2004 SOA or the 2019 SOA apply is the fact that the 2004 SOA granted employees a statutory protected right to receive unvested options after termination if they were good leavers. After the implementation of the 2019 SOA such legal protection no longer applied.
When the two employees ended their employment, they claimed that the 2004 SOA applied, entitling them to receive the unvested portion of their options, as they were good leavers. The company argued that the 2019 SOA applied, and the core of the dispute was consequently a legal interpretation of the transition rules from the 2004 SOA to the 2019 SOA.
Supreme Court Ruling
In the ruling, the Danish Supreme Court established that the decisive factor for whether the 2004 or the 2019 SOA applies, is at what point in time the actual and legally binding promise of participation in the option-based incentive plan has been made to the employee. If the promise was given before 1 January 2019, the 2004 SOA applies. If the promise was given after
1 January 2019, the 2019 SOA applies.
The Supreme Court further explained that the equity incentive plan did not constitute such an actual and legally binding promise in itself as it was merely the overall framework for grants and did not set out any promise of participation. Whether the 2004 SOA or the 2019 SOA applied therefore depended on when they received their individual offer of participation.
As the unvested options upon termination were all relating to offers granted after 1 January 2019, the 2019 SOA applied. Consequently, no statutory protected right to receive unvested options after termination applied, and the handling of the unvested options would therefore depend on what was agreed upon between the parties.
In this scenario, it meant that the employees did not have any entitlement to the unvested part of their options, as the 2019 SOA prescribes freedom of contract, and the company’s equity incentive plan and individual offers of participation prescribed that unvested options would lapse upon termination.
Key Legal Considerations
The Supreme Court ruling has now clarified what applies when an employee leave his or her position before all awarded options have vested, and it will consequently be easier for employers to handle unvested options upon termination correctly in the future.
Based on the ruling, companies can now limit economic exposure by limiting non-intended payments of unvested options to employees, who left the company, while still complying with the 2019 SOA. It is, however, important for companies to ensure that the transition to the 2019 SOA is handled correctly. Therefore, it is recommended for employers to consider whether
any amendments of their incentive schemes are desirable.
Navigating the complexities of equity incentive plans and the legislative changes can be challenging for both employers and employees. ECOVIS Legal Denmark’s Employment and Labour department is ready to assist, offering expert advice and pragmatic solutions in matters related to handling of equity incentive schemes in employment relationships.
Ecovis welcomes STROHAL LEGAL – Member of ECOVIS International as Exclusive Legal Partner in the United Arab Emirates (UAE).
16.06.2025
ECOVIS International is pleased to announce its new exclusive legal partner, STROHAL LEGAL – Member of ECOVIS International, headquartered in the United Arab Emirates (UAE).
With a strong presence in the UAE since 2005, STROHAL LEGAL is a pioneer in the region, being the first foreign-owned international legal consultancy licensed onshore in the Emirate of Ras Al Khaimah. Under the leadership of Jakob Kisser, the firm has become a trusted name in UAE business law, serving clients from across the globe.
Their areas of expertise include:
Corporate and Commercial Law
Mergers & Acquisitions (M&A)
Business Setups, Expansions, and Relocations
Employment, Labour Law & Immigration
Real Estate and Construction
Intellectual Property (IP) Rights
Dispute Resolution & Litigation
Tax Advisory & Structuring
STROHAL LEGAL advises a diverse international clientele, with a particular focus on clients from the DACH region (Germany, Austria, and Switzerland). Its multilingual team—trained in Austria, Germany, Egypt, South Africa, and Ukraine—combines civil law expertise with strong regional insight. This cross-jurisdictional approach enables the firm to deliver practical legal solutions across corporate, commercial, and regulatory matters in the UAE.
Commenting on the new affiliation, Managing Partner Jakob Kisser stated:
“We are honoured to join ECOVIS International, expanding our reach through a global platform that aligns with our commitment to practical, high-quality legal advice. This partnership connects us with an extensive network of professionals and enhances our cross-border capabilities, allowing us to better serve an increasingly international market and the vibrant growth in the UAE. We look forward to collaborating closely with our ECOVIS colleagues worldwide to deliver seamless, results-driven solutions for our clients.”
To learn more about STROHAL LEGAL, please visit their website or reach out to Jakob Kisser at jkisser@slglaw.cc.
We warmly welcome our new colleagues from the United Arab Emirates to the Ecovis network!
VAT refund China: A paradigm shift for foreign tourists
12.06.2025
Foreign tourists in China can receive an instant VAT refund on purchased goods at certain retail stores. With this nationwide real-time VAT refund system, the government aims to increase the attractiveness of the country for international visitors. The Ecovis experts explain the process.
Under the new rules issued by the State Taxation Administration (STA), foreign tourists who shop at certified tax-free retailers can receive their VAT refund on the spot, following a credit card pre-authorisation. Customs will later verify the purchase and traveller’s identity upon departure, at which point the refund becomes final. To qualify, the buyer must reside outside mainland China and stay no longer than 183 days.
The advantages of the VAT refund system
This new system offers clear advantages: no more lengthy refund queues at airports, no paperwork in many stores, and immediate liquidity – refunds are credited to the shopper’s account within minutes. Currently, in Zhejiang Province alone, over 120 stores already support this process. Feedback from travellers has been overwhelmingly positive, citing speed and convenience as key benefits.
Bring your passport with you when you go shopping and ask the retailer about the exact procedure. Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
The reform is part of China’s broader strategy to stimulate inbound tourism and consumer spending. Compared globally, this policy places China alongside leading countries such as South Korea and Japan, which have also introduced point-of-sale VAT refunds.
For further information please contact:
Pingwen Hu, Senior Partner and Certified Public Accountant, ECOVIS Ruide Certified Public Accountants Co., Ltd, Shanghai, China
Email: pingwen.hu@ecovis.cn
Transfer pricing: A comprehensive compliance guide for the Czech Republic, Hungary, Poland and Slovakia
05.06.2025
Transfer pricing has become a critical issue for multinational companies operating in the Visegrád Group (V4), which includes the Czech Republic, Hungary, Poland, and Slovakia. Ecovis experts from these countries have therefore developed a comprehensive guide to help companies correctly implement the requirements.
The alliance shares a rich historical and economic background, which has created close business ties and made the region an attractive destination for foreign investment. Nevertheless, the V4 maintain distinct legislative and regulatory environments, particularly in the field of transfer pricing, creating both opportunities and significant compliance challenges for companies.
OECD guidelines on transfer pricing in national legislation
The V4 countries, as members of the OECD, have incorporated the OECD transfer pricing guidelines and the BEPS (Base Erosion and Profit Shifting) framework into their national legislation. However, each member state interprets and applies the soft law differently, leading to a diverse and sometimes fragmented regulatory landscape.
Over the past few years, transfer pricing has attracted heightened attention from tax authorities across the region. The post-COVID era has seen a wave of legislative updates and stricter enforcement, with authorities leveraging transfer pricing audits as a key tool to address potential non-compliance. As a result, tax advisors must navigate not only national documentation requirements – such as Local Files and Country-by-Country (CbC) notifications – but also the small details of each jurisdiction’s approach to compliance, penalties, and audit procedures.
The complexity emerges further in documentation thresholds, language requirements, penalty regimes, and the use of databases for benchmarking. For example, the criteria for related-party definitions, the scope of documentation, and the treatment of low-value transactions vary significantly. Moreover, the increasing digitalisation of tax administration and the introduction of new reporting forms have placed additional pressure on taxpayers to maintain robust and up-to-date transfer pricing documentation.
What companies should do now
Given the dynamic regulatory environment and the growing scrutiny from tax authorities, companies operating in the V4 must be proactive in managing their transfer pricing risks. Accurate and country-specific documentation with a thorough understanding of local regulations is essential to avoid costly penalties and ensure compliance.
As the region continues to evolve its approach to transfer pricing, staying informed of legislative changes and audit trends will be crucial for businesses seeking to navigate the complexities of the V4 market.
Why is the Lithuanian Employment and Migration Framework Attractive for Foreign Investors?
04.06.2025
Lithuania offers a dynamic and business-friendly environment, characterized by an open economy and the advantages of membership in the European Union. Strategically located at the crossroads of Northern, Central, and Eastern Europe, Lithuania serves as an attractive hub for regional headquarters, fintech companies, shared service centers, and logistics providers. The country benefits from a highly educated, multilingual workforce and a well-developed digital infrastructure, including efficient public services, which together enhance its appeal to international investors and skilled foreign professionals.
The Lithuanian labor market is governed by the Labour Code of the Republic of Lithuania, which aligns with European Union directives and provides a comprehensive yet flexible framework for employment relationships. On of the main advantages of the Labour Code is that it covers a wide range of employment contracts, including indefinite-term, fixed-term, part-time, and temporary agency agreements, allowing employers and employees to tailor arrangements to their specific needs.
Lithuania also recognizes modern forms of work, such as remote work and hybrid models, which have become increasingly relevant in today’s global business environment. nd compensation.
Residence permits for qualified workers
Foreign nationals from outside the European Union or European Economic Area seeking to work or invest in Lithuania generally require a residence permit. The two primary categories involve permits granted either on the basis of employment or for business activities. Non-EU citizens with a confirmed job offer from a Lithuanian employer can apply for a temporary residence permit for employment. This requires that the hiring company has been active in Lithuania for at least six months and that the employment contract covers a minimum period (at least six months). The permit is typically issued for a period of two to three years and is renewable, provided the conditions continue to be met.
Highly qualified professionals may apply for the EU Blue Card, which offers a streamlined pathway to work and reside in Lithuania. Eligibility is contingent on holding a higher education degree or equivalent professional experience, particularly in sectors such as information and communication technologies (ICT). Employers must offer a salary that meets or exceeds definedthresholds..
For foreign investors and business owners, Lithuania offers residence permits tied to business activities. To qualify, the company must demonstrate real operations within Lithuania and maintain a workforce composed of full-time Lithuanian or EU/EEA employees with salaries amounting to at least twice the national average. In addition, minimum capital requirements and personal investments must be fulfilled, with the applicant holding a significant ownership stake or management role within the company.
Lithuania’s migration regulation also supports family reunification. Close family members of residence permit holders, including spouses and dependent children, may obtain temporary residence permits, typically granted for the same duration as the primary permit holder’s stay.
Lithuania’s transparent and efficient approach to employment and migration regulation, together with its strategic location and supportive business environment, make it an increasingly preferred destination for international investors and skilled professionals seeking growth opportunities in Europe.
For companies planning to expand their operations into Lithuania or relocate key talent from abroad, understanding the country’s employment and migration framework is essential.
Tax policy Germany: New coalition agreement brings tax policy shifts
02.06.2025
The new German federal government has adopted tax changes for companies in its coalition agreement. These include corporate taxation, tax relief for work and income, as well as for electromobility and energy efficiency. The Ecovis tax advisors explain the details.
The new coalition of the Christian Democratic Union (CDU), Christian Social Union (CSU), and Social Democratic Party (SPD) has also set numerous goals in its coalition agreement to strengthen the economy and Germany as a business location.
Tax incentives for investment
The coalition agreement introduces several changes to corporate taxation, notably a 30% accelerated depreciation for certain business investments, limited to the years 2025-2027.This measure aims to encourage investments in new business assets, particularly in the technology and infrastructure sectors. In addition, tax breaks for research and development spending are to be expanded. The goal is to boost companies’ innovation power – this could be achieved in the future through expanded business expense deductions or targeted R&D bonuses.
Corporate taxation
The corporate tax rate will be gradually reduced by 1% each year starting in 2028, from the current rate of 15%. The solidarity surcharge will remain, and the minimum trade tax rate will increase from 200% to 280%, raising the tax burden on businesses in some regions. The introduction of an investment allowance for small and medium-sized enterprises (up to EUR 50,000 annually for future investments) is intended to make Germany an attractive location for business again. As things stand at present, there are no plans to increase income tax rates.
Tax relief in Germany would be a positive signal for companies and the location. Marion Dechant, Tax Advisor, ECOVIS Wirtschaftstreuhand GmbH Auditors, Munich, Germany
Energy taxes
In order to reduce energy prices, the electricity tax is to be reduced to the minimum level specified by European law. Also, tax exemptions for agricultural diesel engines are to be maintained, protecting farmers from additional costs.
Tax relief for work and income
A new provision could allow for tax-free overtime in certain sectors, which may reduce the overall tax burden for employees working overtime. Additionally, retirees may benefit from a EUR 2,000 tax-free monthly allowance if they continue working after reaching the official retirement age. This is intended to support older citizens, particularly those who wish to remain active in the workforce after retirement. The commuter allowance is expected to rise to EUR 0.38 per kilometre starting in 2026 (currently EUR 0.30). This change could make commuting more financially viable for individuals living in more remote areas.
Electromobility
Electric vehicles used as company cars are to receive tax incentives by increasing the gross price limit to EUR 100,000. In addition, special depreciation allowances are to be introduced for electric vehicles to promote the transformation of the transport sector. Furthermore, the motor vehicle tax exemption for electric vehicles will be extended until 2035.
E-invoicing Poland: What companies need to know about the introduction
30.05.2025
Polish lawmakers are working on introducing a national e-invoice system (KSeF). Currently, taxpayers can use the platform for issuing and receiving electronic invoices voluntarily; starting in 2026, use of the system will be mandatory. The Ecovis experts recommend that companies prepare now.
The background to the national e-invoice system
KSeF is an IT system for sending, receiving and storing structured invoices containing the mandatory fields specified by the regulations in xml file format (so-called e-invoices). Once the invoice data is entered into the system, the document is assigned a unique identification number and the system verifies that the data complies with the structured invoice template. The invoice itself will be deemed to have been issued on the day it is uploaded to the system and to have been received on the day it is assigned a KSeF number.
The basic functions of the system include:
Issuing of invoices by sellers
Receipt of invoices by purchasers
Real-time control of transactions by tax administration authorities
The granting and withdrawal of rights and authorisation in the system
E-invoices can also be issued using free tools to be made available by the Ministry of Finance or commercial software.
Who must issue electronic invoices using the KSeF system
The KSeF system will cover all active VAT taxpayers, entrepreneurs exempt from VAT and taxpayers identified in Poland for the OSS procedure with a Polish TIN.
The obligation to issue e-invoices will not apply, among others, to:
Taxpayers who have neither the seat of their economic activity nor a permanent place of business activity in the territory of Poland
Taxpayers who do not have the seat of their economic activity in the territory of Poland but have a permanent place of business activity in Poland if this is not connected with the invoiced supply of goods or the provision of services.
We can assist you during implementation a system to issue e-invoices in your entity. Hubert Kaczyński, Tax Advisor, ECOVIS Poland, Warsaw, Poland
When does the KSeF obligation apply
From 2026 onwards, the mandatory use for taxpayers will be staggered. Thus, the KSeF will be mandatory:
From 1 February 2026 for large entities (who exceeded PLN 200 million in turnover in the previous year)
From 1 April 2026 for all entities
Challenges related to the implementation of the system
The key challenge associated with the regulation is ensuring the accuracy and completeness of the data contained in the e-invoice.
Adapting a company to issue and receive e-invoices will not only require the implementation of modifications to IT systems but also the introduction of appropriate changes to business processes for issuing, receiving and circulating invoices, as well as to contracts and regulations.
KSef vs. the VIDA package
The Ministry of Finance has no plans to abandon the mandatory implementation of KSeF or to postpone it until the EU legislation related to the so-called VIDA package comes into force.
ViDA (VAT in the Digital Age) is a package published on 8 December 2022 by the European Commission, which is linked to the EU’s goal of establishing a smoothly functioning internal market within VAT, which involves mandatory e-invoicing in the EU.
The Ministry of Finance assures that the implementation of the ViDA package will not change the functionality of KSeF. According to the Ministry, the Polish system will be able to meet the requirements for issuing e-invoices and the reporting data for EU purposes. Furthermore, it out that the EU e-invoice format under ViDA will be mostly mandatory for cross-border transactions, while KSeF will remain a national tool.
Sustainable tax Türkiye: Tax instruments on the path to sustainability
28.05.2025
With the tax instruments gradually introduced over the years to promote sustainability, Türkiye aims to move closer to global climate targets and align with EU regulations such as the Carbon Border Adjustment Mechanism (CBAM).
The concept of sustainability is no longer limited to environmental policies; it has become central to tax policy as well. Sustainable tax practices are not only designed to raise public revenues but also to promote environmental protection, social justice, and economic stability. This is particularly critical for developing countries like Türkiye, where climate challenges and income inequality are prominent.
Sustainable tax instruments in Türkiye
Türkiye has introduced several tax instruments to support sustainability:
Environmental cleaning tax (ÇTV): Collected via water bills by municipalities, this tax funds waste collection and environmental services.
Motor vehicles tax (MTV): Vehicle emissions have been included in the tax calculation since 2018.
Plastic bag fee: Introduced in 2019, single-use plastic bags are sold for TRY 0.50 to reduce consumption.
Energy efficiency incentives: VAT and SCT exemptions are offered for renewable energy investments and energy-efficient products.
In 2025, Türkiye’s Banking Regulation and Supervision Agency (BRSA) introduced the green asset ratio, encouraging banks to finance environmentally sustainable projects. Additionally, mandatory sustainability reporting was introduced in 2024 for large companies exceeding certain thresholds in assets, revenue or employment.
Contact us if you have any tax-related questions concerning environmental and sustainability issues. Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Why is it relevant now?
Türkiye aims to align with global climate goals while adapting to EU regulations such as the CBAM. At the same time, its current tax structure relies heavily on indirect taxes – over 65% of total revenue – placing a greater burden on low-income groups. At the same time, environmental taxes account for only 1.2% of total revenue, far below the EU average of 2.4%. These figures highlight the urgent need for a shift towards more equitable and sustainable taxation.
Conclusion and recommendations
To achieve its green transformation and economic resilience, Türkiye must restructure its tax system. This includes increasing environmental taxes, shifting to direct taxes such as income and wealth taxes, incentivising green investments and combating informality using digital tools. These reforms would not only support climate goals but also promote social equity and long-term fiscal balance, say the Ecovis advisors.
For further information please contact:
Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: mbulut@diplomatymm.com.tr
Efil Çetin, CPA, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: ecetin@diplomatymm.com.tr
Buying property in Hungary as a foreigner: Rules and regulations
26.05.2025
Foreign natural or legal persons must obtain a permit if they wish to purchase real estate in Hungary. However, there are numerous exceptions. The Ecovis consultants explain what these are and what documents must be submitted for approval.
The acquisition of real estate by foreigners in Hungary is governed mainly by the “Act on certain rules for the lease and disposal of flats and premises” and the government decree on the “acquisitions by foreigners of real estate other than agricultural and forestry land.”
