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Financial Participation

Employees’ financial participation is subject to minimal regulations under Spanish legislation. The Spanish Constitution of 1978 underlines that the state should promote employees’ access to the ownership of the means of production, favouring the purchasing of stock options. In spite of this, legislation on this aspect is minimal.1 There are no specific statutory provisions covering profit-sharing.2

Supplementary payments are governed by the 1986 Workers’ Statute. Policy regulations focus on the social economy and cooperatives. Law No. 11/1994 reformed the labour market while trying to make the rigid payment structures more flexible. The 1986 Workers’ Statute regulated employee buy-outs and was modified in 1997 to create special employee financial participation schemes for workers’ public or private limited companies. The cooperatives are governed by law no. 27/1999 and by the laws of the autonomous regions.

Income deriving from company shares is tax-free under the following conditions. The shares must have been offered to all employees of the company; an employee and his family must not possess more than 5% of total company shares; and the shares must be held for at least 3 years. The annual tax-free amount is €12,000. In groups of companies, the share options must be offered to employees of the whole group. Employees wanting to take up share options are subject to income tax, with the taxable amount being the difference between the share’s market price and the price at which the share is actually bought. The employer deducts the tax at source, also paying social security contributions. There are lower tax rates for shares held longer than one year.

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.