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Revenue introduces new electronic share scheme return

By May 18, 2021No Comments

Revenue has announced that it intends to issue the new electronic return of information form provided for in Finance Act 2020. This form will have a filing deadline of 31 August 2021 for the 2020 tax year. Thereafter, a reporting date of 31 March following the relevant tax year will apply.

It is anticipated that the Employer’s Share Awards (ESA) return, which is in the final stages of development at Revenue will be issued in June 2021. The ESA will be an all-in-one form with a similar format to the existing KEEP1, RSS1 and ESS1 electronic returns and will be uploaded through the Revenue Online Service (ROS).

The ESA form is being introduced on foot of Section 8 of the Finance Act 2020, which provides for the mandatory electronic reporting of certain share-based remuneration. This includes restricted stock units (RSUs), restricted shares, convertible shares, forfeitable shares, discounted shares, and any other awards with cash-equivalent of shares.

IPSA Vice-Chair Gemma Jacobsen said: “IPSA has engaged extensively with Revenue during the development of the ESA form and has advised where we believe Revenue is, through the electronic return form, requesting information that is neither required under current legislation nor is relevant for Revenue.

“Revenue has advised that it will require details of the award of Restricted Share Units to employees even though the employee has neither a tax liability at award nor is an actual shareholder at that time. IPSAsuggested that the return should not be introduced for the 2020 tax year and is more correctly due for 2021,with reporting arising by 31 Match 2022. However, Revenue has disagreed with IPSA and, as noted above,the return will be due for filing on 31 August 2021.”

The new return form is not applicable to nor does it replace the existing forms for KEEP and SAYE options, Approved Profit-Sharing Schemes and Employee Share Ownership Trusts. Nor does it, at present, replace the return of information for share options (i.e. the RSS1).

However, IPSA has suggested that the RSS1 covering share options might be included in the new ESA return for future years. Members are reminded that the due date for filing the returns of information for such share schemes for the 2020 tax year was 31 March 2021.

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