ATO Interpretative Decision
ATO ID 2014/42
Income Tax
Income: employer costs for the purpose of administering its employee share scheme are deductible
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Will costs incurred by the taxpayer company in implementing and administering the Employee Share Scheme (the Scheme) be deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
Yes. The costs incurred by the taxpayer company in implementing and administering the Scheme will be deductible under section 8-1 of the ITAA 1997.
Facts
The Scheme complies with the provisions of Division 83A of the ITAA 1997.
A Trustee is appointed to administer the Scheme. The taxpayer incurs costs of operating the Scheme. These costs include brokerage fees, audit fees, bank charges and other ongoing administrative expenses.
Reasons for Decision
The operating costs associated with the implementation and administration of the Scheme are part of the ordinary employee remuneration costs of the taxpayer. Accordingly they are deductible under section 8-1 of the ITAA 1997 in the year that they are incurred.
Date of decision: 27 October 2014Year of income: Year ending 30 June 2008
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Division 83A
The Act Related ATO Interpretative Decisions
ATO ID 2002/961 (withdrawn)
Keywords
Deductions
Employee share schemes & options
Share discounts on employee share schemes
Date reviewed: 23 October 2017
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 27 October 2014 | Original statement |
| 23 February 2022 | Archived |