New share plan tax reporting requirements to be complied with from 14 July 2010
05/07/2010
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On 16 and 18 June 2010 the Australian Taxation Office (ATO) released information, including pro-forma reporting forms and fact sheets, on the new employer reporting obligations that apply from 1 July 2009 in relation to employee share schemes.

Given that the first reporting requirement is 14 July 2010, one could be forgiven for thinking that the ATO has left the release of these details a tad late to allow employers and their service providers to comply.  But, to be fair, the ATO has managed to squeeze in a lot of industry consultation in the incredibly short window allowed by the Australian government since it got its act together enough to get the tax bill through parliament just prior to Christmas (see HERE

           

Under the new reporting requirements, certain information must be provided annually to both employees and the ATO.  There are also certain concessions being provided in relation to reporting for the 2010 tax year.

The deadline for employers to provide employees with an annual share scheme statement is 14 July 2010, while the deadline for the share scheme annual report to be provided to the ATO is 14 August 2010.

This article summarises what employers need to provide.

Employee Share Scheme (ESS) statement to be provided to employees

The ESS statement which employers must provide to employees by 14 July following the end of the tax year must include the following information:

·    The discount on ESS interests acquired under taxed-upfront schemes

·    The discount on ESS interests acquired under tax-deferred schemes

·    The discount on shares and rights acquired before 1 July 2009 for which a taxing event occurred during the tax year

·    The total of Tax File Number amounts withheld from discounts during the financial year.

It should be noted that an amended ESS statement must be provided to the employee if you become aware of any material change or material omission in any information provided to your employee.  The amended ESS statement must be provided to the employee within 30 days of becoming aware of the change or omission.

ESS annual report to be provided to the ATO

The ESS annual report that employers must provide to the ATO by 14 August following the end of the tax year will include the information provided to each employee in the ESS statement (see above) and the following additional information:

·    A plan identifier which identifies each ESS plan that a company operates

·    The date of the taxing point

·    The number of ESS interests for a taxing point arose during the tax year

·    The number of ESS interests acquired from a foreign source (optional)

·    The discount for ESS interests which have a foreign source (optional)

Full details of reporting requirements can be found HERE.

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