Parliamentary inquiry into employee share scheme taxation

The Treasurer, The Hon Josh Frydenberg MP, the Standing Committee on Tax and Revenue will inquire into and report on the Tax Treatment of Employee Share Schemes.

“Again?” you may ask. Such enquiries happen with every election cycle (which is to say, often).

The Committee invites interested persons and organisations to make a submission by Thursday, 19 March 2020.

Blink and you might miss the opportunity to comment on current shortcomings!

An Employee Share Scheme (ESS) is a scheme where employers offer shares or options to an employee in relation to their employment. ESS are designed to align employees’ interests to those of the company. In 2015 the Government made a number of changes aimed at improving the taxation treatment and administrative arrangements for ESS.

The Committee will inquire into the effectiveness of the 2015 Employee Share Scheme (ESS) changes and examine:

  • how effective the changes in 2015 have been in their goal of bolstering entrepreneurship in Australia and supporting start-up companies;
  • the costs and benefits of these concessional taxation treatments, and deferred taxing points for options, to the broader community;
  • whether the current tax treatment of ESS remains relevant to start-up companies and whether any changes are appropriate to ensure the taxation treatment remains relevant;
  • how companies currently structure their ESS arrangements and how taxation treatment affects these decisions; and
  • the challenges faced by companies in setting up an ESS arrangement and how the standard documents by the Australian Taxation Office, and introduced in 2015, assist this process and whether additional improvements should be made.

We suggest you may want to dust off the last submission, given the issues are still the same. Nevertheless, worth a go.

See HERE .

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