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Elements of the Taxation of Employee Share Scheme Arrangements

On 23 April 2010, the then Assistant Treasurer announced the release of the Board of Taxation’s report  on its review into elements of the taxation of employee share schemes.

The Board’s report makes five recommendations and includes advice from the Australian Government Actuary into the valuation of unlisted rights. The then Assistant Treasurer said that “the findings of the Board are consistent with the Government’s recent employee share scheme reforms, and the Government agrees with all of the Board’s recommendations.”

The Board’s report on its review into elements of the taxation of employee share schemes is available for download. Printed versions of the report are available by email request sent to taxboard@treasury.gov.au or by phoning the Board of Taxation Secretariat on 02 6263 4366.

Background

On 1 July 2009, the then Assistant Treasurer released a Policy Statement  setting out the final taxation treatment of shares and rights acquired under employee share schemes, with the policy to be applied from that date.

On 24 July 2009, the then Assistant Treasurer released the details of the industry consultation and the terms of reference  for the Board’s review into elements of the taxation of employee scheme arrangements.

Under the terms of reference the Board was requested to examine:

In undertaking the review, the Board was to consider:

The Board was asked to consult widely and to provide all stakeholders with the opportunity to participate in the review. After considering the views of all stakeholders the Board was to provide a final report to the Government by the end of February 2010.

In conducting the review, the Board had regard to the Government’s taxation review headed by Dr Ken Henry. Further information on the Review of Australia’s future tax system can be found at www.taxreview.treasury.gov.au .

On 7 September 2009, the Chairman of the Board of Taxation announced that the Board was inviting submissions for its review into elements of the taxation of employee share schemes.

The Board requested written submissions on the review into elements of the taxation of employee share scheme arrangements by 9 October 2009. All submissions received were acknowledged.

The Board completed its review into elements of the taxation of employee share schemes and provided its report to the then Assistant Treasurer in February 2010. In preparing its report the Board took into account the various submissions to the review, advice from its expert panel and discussions with stakeholders.

Further information on this review can be obtained from the Board of Taxation Secretariat on 02 6263 4366.

Submissions received

SubmitterDownload
Association of Mining and Exploration Companies Inc39KB
Australian Institute of Company Directors768KB
Australian Petroleum Production & Exploration Association84KB
AVCAL: The Australian Private Equity & Venture Capital Association Ltd1009KB
Baker & McKenzie2MB
Cox, K.11KB
CRA Plan Managers Pty Ltd206KB
Eggleston, T.16KB
Ernst & Young165KB
Innovation Capital Associates Pty Ltd72KB
Institute of Chartered Accountants in Australia178KB
IT Industry Innovation Council131KB
JLR Partners Group31KB
Kalinko, W.192KB
Kirkwood, J.2MB
Link Market Services Limited54KB
Nissen Kestel Harford145KB
Origin Energy Limited2MB
Remuneration Strategies Group Pty Ltd734KB
Starfish Ventures Pty Ltd83KB
Taxation Institute of Australia55KB
Woolworths Limited293KB