Irish Revenue has issued a series of eBriefs concerning share-based remuneration.
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Revenue eBrief No. 120/21 Updated Share Schemes Manual and New Share Schemes Reporting Return (Form ESA)
Section 8 of the Finance Act 2020 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 award with cash-equivalent of shares.
Further to eBrief No. 103/21, the electronic Employer's Share Awards return (Form ESA) 2020 will be available on the Revenue website from 21 June 2021.
The new return will have a format very similar to the existing KEEP1, RSS1 and ESS1 electronic returns - a pre-formatted spreadsheet which can be uploaded through the Revenue Online Service (ROS).
The electronic Form ESA will apply for the tax year 2020 onwards, with a filing deadline of 31 August 2021 for the 2020 return only. For subsequent years, the reporting date of 31 March following the relevant tax year will apply.
The instructions and explanatory notes for customers and agents on the completion and filing of the electronic Form ESA are included in the form and the relevant TDMs. Chapter 15 (previously Chapter 13) of the Share Schemes manual, 'Share Scheme Reporting', is being updated to include guidance on filing of the return.
The following chapters of the Share Schemes manual have also been updated to include references to the reporting obligations on the Form ESA:
- Chapter 02 – Restricted Stock Units (RSU)
- Chapter 04 – Employee Share Purchase Plans (ESPP)
- Chapter 05 – Convertible Shares
- Chapter 06 – Forfeitable Shares
- Chapter 07 – Shares acquired at less than Market Value
- Chapter 08 – Restricted Shares. (This chapter has also been updated to include clarification in relation to the individual's responsibility to adjust income tax on a self-assessment basis if there is any variation in the restriction.)
Additionally, two new chapters have been added to the Share Schemes manual:
References to these two new chapters have been included in Chapter 01 – Introduction and Overview.
Note that further updates to the Share Schemes manual may follow in the next few weeks as Revenue will consider any feedback received on the above updates.
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Revenue eBrief No. 121/21 Approved Profit Sharing Schemes (APSS)
Chapter 10 of the Share Schemes Manual on Approved Profit Sharing Schemes (APSS) has been updated as follows:
- Paragraph 10.3.7 has been inserted to request that companies who have schemes which are no longer active and that will not be active again in the future notify Revenue so that the schemes can be de-registered.
- Paragraph 10.5.1 has been amended to highlight the fact that trust instruments submitted to Revenue for approval must be governed by Irish law.
- Paragraph 10.6.10 has been divided into three sub paragraphs for clarity.
- Paragraph 10.6.10.1 has been amended as follows:
- To update references to Chapter 13 of the consolidated Share Scheme Manual to Chapter 15.
- To confirm that the filing deadline for the 2019 ESS1 was extended from 31 March 2020 to 31 October 2020.
- To highlight that the tax registration number of the establishing company, or its Irish subsidiary in cases where the establishing company is a foreign parent company, is a mandatory filed on the ESS1 return.
- To confirm that a nil ESS1 return must be filed where no activity has taken place for an approved scheme during a year of assessment.
- Paragraph 10.6.10.3 has been inserted to confirm that trusts established for the purpose of an APSS are considered excluded accounts for CRS DAC2 reporting requirements and an excluded product for FATCA purposes.
- Paragraph 10.12.2 has been amended to confirm employers obligation to return employee PRSI and USC due through payroll.
- Paragraph 10.12.12 has been inserted to set out the treatment that will apply where a scheme participant is accidentally omitted from an appropriation of shares.
- Paragraph 10.14.9 has been inserted to set out the tax treatment of a distribution in specie from a demerged company where shares have been appropriated to participants of an APSS and the release date for those shares has not been reached. This update incorporates content previously included in Revenue Tax Briefing Issue 54 - December 2003.
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Revenue eBrief No. 123/21 Form ESA now available for download from Revenue website
Further to eBrief No. 120/21, the electronic Employer's Share Awards return (Form ESA) 2020 is now available for download from the Revenue website.
The new electronic return will apply for the tax year 2020 onwards, with a filing deadline of 31 August 2021 for the 2020 return. Note that for subsequent years, the reporting date of 31 March following the relevant tax year will apply.
The instructions and explanatory notes for customers and agents on the completion and filing of the electronic Form ESA are included in the form. Further information is included in section 3.3 of Chapter 15 Share Scheme Reporting (SSR).