BCA/CTA Submission to the Treasury on Employee Share Plans

The Business Council of Australia and Corporate Tax Association have jointly lodged a submission to the federal government on the taxation of employee share plans.

The submission:

  • Highlights how improved reporting arrangements could operate to improve compliance.
  • Argues against the introduction of an income threshold.
  • Continues to push the existing ‘capacity to pay’ principle as representing a fundamental benchmark to be followed.

If this is not accepted, the submission included a fallback position whereby the taxing point should be based on the earlier of when the employee is ‘first capable of dealing’ with the shares/rights, and the end of a seven year period after the employee first acquired the share/right.

The submission also makes the point that the termination of employment is not an appropriate taxing point for the taxation of employee share plan income when the shares or rights remain unvested.

Joint BCA/CTA Submission on Employee Share Plans