Has your company (or parent company) provided free or discounted shares or rights to receive shares to employees, directors or individual consultants (Employees), or their nominees, during the 2018 income year?

Alternatively, have discounted shares or rights which were provided in a prior year vested, or been exercised, in 2018, or been allowed to be kept by an Employee who has ceased employment/providing services during this income year?

If the answer is ‘Yes’ to either of these questions then there’s a good chance that the provider company will need to report details of all or some of these shares or rights to:

  • the recipient Employee by 14 July 2018; and
  • the Australian Tax Office (ATO) by 14 August 2018.

In particular, a 2018 employee share scheme (ESS) reporting obligation will arise in respect of discounted shares or rights provided:

  • to an Employee (nominee) in 2018 which are structured to take advantage of the ‘start-up’ concessions in the ESS tax laws; or
  • to an Employee (nominee) in 2018, or an earlier income year, which have had (will have) an ESS taxing point during the 2018 income year (generating a taxable ESS discount for the Employee).

How Grant Thornton can assist

Grant Thornton’s Remuneration Taxes Group are specialists in the delivery of a wide array of ESS-related tax advisory and compliance services to corporate clients of all types and sizes, including assisting both Australian and international companies:

  • with the selection, design and implementation of equity-based employee incentive/reward arrangements; and
  • in meeting their (Australian) ESS reporting (and where applicable, associated payroll tax) obligations. 

In particular, where required, our ESS reporting services include preparing explanatory Tax Notes for clients to provide to their affected Employees with their ESS Statements to assist the Employees in meeting their resultant individual income tax obligations.

If you’re unsure whether your company has a 2018 ESS reporting obligation, or need assistance with the preparation and lodgment of your 2018 ESS reporting documents or with any other aspect of your current or proposed ESS arrangements, get in touch with the team below.