Employee Financial Participation in Companies´ Proceeds (FWC No. IP/A/ECON/FWC/2010-109 (Lot 5)) (Study 180 p.) / Funding: European Parliament (Jan. 2012 – Sep. 2013)

This study provides an overview of the development of employee financial participation (EFP) across the EU-27 and shows its positive dynamic between 2000 and 2009, despite the recent financial crisis.
A comparison of the rules and regulations on general taxation, social security contributions and specific tax incentives for EFP schemes across the EU indicates that fiscal incentives, while not a prerequisite to EFP do promote the spread of these schemes. To provide transparency concerning fiscal treatment of EFP schemes, effective tax rates on different schemes are presented. Eight cases were selected and analysed to identify both the best practice and the obstacles to promoting best practice. This study concludes with a proposal for an alternative approach to a European framework: the “28th regime on Employee Financial Participation”.