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  • Employers

    Generally, employee share schemes (ESS) are plans that have a life span of 2 to 15 years, and are specifically aimed at creating ownership of company shares by employees. ESS is available to all companies, regardless if they are publicly listed on the stock exchange or privately owned.

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    Tax concessions can apply to ESS interests if you and your employee have followed special tax rules. To gain the benefit of tax concessions, the plan has to be set up in such a way to ensure that the conditions of Division 83A of the Income Tax Assessment Act 1997 are met.

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    If you provide ESS to your employees at a discount, you must meet specific obligations. If ESS interests were not acquired at a discount, the ESS tax rules do not apply. However, other tax obligations may still apply.

    Your obligations will depend on when the employee acquired the ESS interests as there are separate rules for shares acquired before 1 July 2009.

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    Annual reporting

    You must provide an ESS statement to your employee by 14 July after the end of each financial year.

    Your ESS annual report must be lodged to us by 14 August after the end of each financial year. The ESS annual report must be lodged electronically. To lodge your annual reports electronically, you must create your reports on software compatible with our systems.

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    Contact us

    For a call back from us, email TaxAdvice@ato.gov.au

    If you wish to discuss your circumstances, call us on 13 28 61.

    Last modified: 14 Jun 2019QC 47623