It is very common for U.S. parent companies to include key non-resident alien employees of their foreign subsidiaries in their stock option plans. What happens when the non-resident exercises the options or sells the options? Is the non-resident subject to withholding tax? Is there a U.S. tax filing requirement?
CPAs Talk Tech Biz
A blog for the owners, founders, and executives of privately held technology companies.
NextIs Software Tangible or Intangible Property? The Impact to California Income Tax Apportionment
I have noticed that people use the term “service,” “product,” and “intangible” interchangeably in relation to software. For example, I was recently going through a client’s website to learn more about their technology and business, and I asked my husband (an engineer) to help me. He started explaining what they did with various acronyms like WLAN, CMOS, LTE-capable and so on, but it didn’t take long for me to get lost in his tech jargon. After seeing my blank face, he boiled it down to this: they sell a software product. But what does that really mean? What is licensing of software considered? And really, why does it matter?…