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Reform of the Taxation of Employee Share Schemes


Friday, 5 June 2009

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A consultation paper and exposure draft bill on the reform of the taxation of employee share schemes have been jointly released by the Treasurer, the Hon Wayne Swan MP, and the Assistant Treasurer, the Hon Chris Bowen MP.

Through this paper the Government seeks to provide a point of reference for public submissions on the Government's 2009 Budget commitment to better target the concessions for employee share schemes and reduce the opportunities for tax avoidance.

Given the community concerns with the changes announced on Budget night and the possible unintended adverse impacts on employee share scheme arrangements for ordinary employees, the Government has fast-tracked the consultation process.

As outlined in the consultation paper, the Government proposes that the taxation of discounts on employee share scheme shares and rights on acquisition will remain its starting principle. However, the Government will provide concessional tax treatment for particular schemes. The concessions are in the form of a tax exemption, or a tax deferral in limited circumstances.

To provide certainty to employers and employees currently participating in employee share schemes, the Government proposes that the new arrangements commence on 1 July 2009. In the interim, the existing law will apply to all shares and rights acquired before 1 July 2009.

Interested parties are invited to comment on the paper and exposure draft bill. While submissions may be lodged electronically, by post or by facsimile, electronic lodgment is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence.  Automatically generated confidentiality statements in emails do not suffice for this purpose.  Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.  A request made under the Freedom of Information Act 1982 (Commonwealth) for a submission marked 'confidential' to be made available will be determined in accordance with that Act.

Closing date for submissions: Friday, 12 June 2009

Address written submissions to:
Philanthropy and Exemption Unit
Personal and Retirement Income Division
The Treasury
Langton Crescent

Email:  ESSreforms@treasury.gov.au

For enquiries please phone, either Sandra Roussel on (02) 6263 3357, or Chris Leggett on (02) 6263 3208.

Documents Available:

Acrobat (PDF) documents

 Acrobat (PDF)

Consultation Paper - Reform of the taxation of Employee Share Schemes  1,442.81kb
Consultation Summary  34.43kb

Microsoft Word (DOC) documents

 Microsoft Word (DOC)

Consultation Paper - Reform of the taxation of Employee Share Schemes  1,002.50kb

Microsoft Word (RTF) documents

 Microsoft Word (RTF)

Consultation Summary  881.70kb

Related Items:

Submissions: Reform of the Taxation of Employee Share Schemes - 29/06/2009

Treasury received 65 submissions in response to the 'Reform of the taxation of employee share schemes' consultation paper. Fifty four of these are public submissions, and there are 12 confidential submissions. The public submissions are listed below and are accessible by selecting the author.

The opinions expressed in the submissions are those of the authors and do not necessarily reflect the views of the Government or the Treasury.

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