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🇪🇺 Europe · EuropeDry income (equity tax)
Also called: dry tax charge, trockenes Einkommen
In one line
A tax bill triggered by receiving or vesting equity before you have any cash to pay it — a classic European startup problem.
In plain English
If equity is taxed when granted or vested rather than when sold, you can owe tax on value you can't yet access. Several European reforms (like Germany's) aim to defer this 'dry' charge.
If you were explaining it to a 5-year-old
Being asked to pay tax on a toy you were given but can't sell yet — so you owe coins you don't have.
Why it matters when you sell
Dry income is a core reason European employees need liquidity: a secondary can provide the cash to cover a tax bill on illiquid equity.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.