Employers who operate share-based reward plans have an obligation to submit an annual return to Revenue providing details of certain share awards in the previous year. Please find details of key forms and filing deadlines for 2021.
The main return is the Form RSS1, which is a return of share options and other rights. The return must be completed using an electronic form published by Revenue and it must be submitted through the Revenue Online Service (ROS). This form contains information relating to the grant, exercise, assignment or release of share options and it also applies to Employee Stock Purchase Plans which fall under share option legislation in Ireland.
Restricted Stock Units (RSUs) should not be included on the RSS1 return as they are subject to withholding tax through the PAYE system.
The deadline for submission of the 2020 RSS1 return is 31 March 2021.
The Key Employee Engagement Programme (“KEEP”) is a tax-advantaged share option scheme which was introduced on 1 January 2018 with the objective of supporting Irish SMEs with the recruitment and retention of key employees. There is an obligation on every qualifying company under the KEEP scheme to file a return with Revenue for any year in which it grants an option to an employee, or any year in which an option is exercised, transferred or released, otherwise the benefits of the KEEP scheme will be lost. Similar to the Form RSS1, the 2020 Form KEEP1 must be submitted through ROS in electronic format.
The deadline for submission of the 2020 KEEP1 return is 31 March 2021.
Other share reporting obligations
Where an Approved Profit Sharing Scheme (APSS) is in place and where shares are allocated, the scheme trustees are required to file a Form ESS1 by 31 March of the year following the allocation of shares to an employee under the scheme. All ESS1 returns must be filed through ROS.
For Save as you Earn (SAYE) schemes, where share options are granted or exercised in a given year, an employer is required to file a Form SRSO1 by 31 March of the following year.
From 2020 onwards an employer must register with Revenue for share scheme reporting (SSR) via ROS prior to submitting the relevant form. This registration process may take 2 – 3 working days (or longer), therefore it is important to ensure the registration is completed in advance of the 31 March deadline.
Revenue has confirmed that the deadlines for the submission of the above returns will not be extended beyond 31 March 2021, as they were in 2020 as a result of the Covid-19 pandemic.
New Employer Reporting Requirements
Previously, certain share plans did not have a prescribed reporting format. Finance Act 2020 provided for the implementation of a new electronic return which will cover these share plans. While this form is still being developed, Revenue has indicated that this filing requirement will apply for 2020, and they may extend the statutory deadline of 31 March, if the electronic form has not been finalised in advance of this deadline. It is thought that the new form may not be available until mid-June. This new form is expected to be used to report the following share schemes:
- Restricted shares
- Forfeitable shares
- Convertible shares
- Restricted Stock Units
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars employment tax team below:
Published: February 2021