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In the context of international stock plans, this term denotes a local subsidiary's payment to reimburse its multinational parent company for the cost of the subsidiary's equity compensation. Chargebacks are conducted through a recharge agreement. For stock options, the cost is typically the spread at exercise, while for restricted stock or RSUs it is the value at vesting. The chargeback allows the subsidiary to deduct the cost of the reimbursement for tax purposes. For more on this topic and Section 1032 of the US tax code, see an article from KPMG.
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