> If you don't tax vesting, are you going to instead wait until the shares are sold to tax them? That would be very easy to abuse.

would you care going in details on why this would be "very easy to abuse"?

In France that's how ISO works:

You have 2 taxable events:

- At exercise-time, calculate the gain here (between current date price and strike price).

- At sell-time, calculate the gain here (between exercise date price and current date price).

However, the first event, you don't owe any tax yet. You only pay the taxes for both exercise-time and sell-time taxes the year you sell the shares.

See the picture on [1] where "Prix d'exercise" = strike price; "Levée des options" = day you exercise the options.; "Vente des actions" = day you sell the stocks.

What is not 100% clear to me there is, what happens if the stock lost value between exercise date and sell date, can this loss offset the gains made on the first taxable event. In my opinion, to be 100% employee friendly, it should. But since the exercise date could have happened years ago, I'm not sure those can be offset since they aren't the same "type" of gains.

Anyways, with this system, in the case the company goes bankrupt and you never sold the stocks, at least you didn't pay taxes on money you never had in hands, you only loose the money you spent when exercising the options. I don't see how this can be abused.

[1] https://particuliers.societegenerale.fr/epargner/gestion_pat...