Employers will need to change the way they manage their FY16 Employee Share Scheme (ESS) reporting obligations if they have internationally mobile employees participating in an ESS; and/or they previously relied on paper lodgements or the Australian Taxation Office (ATO) Bulk Load Excel Spreadsheet to lodge reports.
Where an ESS participant works outside Australia for some or all of the scheme’s vesting period, some of the income derived at the scheme’s deferred taxing point may be exempt from Australian tax.
Where some of the ESS income is exempt, employers have been able to disclose only the assessable amount when preparing its annual ESS reports.
New for FY16 will be the requirement for employers to confirm if the amounts disclosed are gross or assessable, and if only the assessable portion has been reported, additional information relating to assignment dates will also need to be reported.
The ATO has also changed the way that ESS is to be reported. The only lodgment channels available from FY16 onwards will be:
If your organisation is impacted by these changes, you should start planning how you will manage these new obligations now, so that FY16 reporting deadlines can be managed.
The changes are summarised in the ATO specifications document for software developers, or call your KPMG contact for more information.