On Monday 26 June, the European Commission authorised a Swedish aid regime aiming to reduce taxation on share options offered to company employees.
The Swedish State will allocate around €16.35 million over a period of 10 years to allow innovative, small and young companies to be able to recruit and retain their employees without unduly distorting competition. The aid will take the form of a tax reduction on share options offered to company staff.
This will allow employers to reduce their salary costs and hence their social security contributions, while employees will benefit from lower income tax when they exercise these options. Companies will therefore be encouraged to recruit due to lower financial risks and employees will be encouraged to continue to work for smaller businesses.
The European Commission believes this measure was necessary to allow smaller Swedish companies to offer their employees competitive salary packages and thereby contribute to economic growth and innovation. As the Treaty on the Functioning of the European Union (TFEU) authorises State aid aiming to promote the development of certain activities or economic regions, the Commission concluded that the above measures were compatible with EU law on State aid. (Original version in French by Lucas Tripoteau)