The Irish Revenue has recently announced a new share reporting obligation for employers. The deadline for filing the new “Employer’s Share Awards Return” for 2020 was the 31 August 2021.
The new “Employer’s Share Awards (ESA) Return” covers the following:
- Restricted stock units (RSUs) share-settled;
- Restricted stock units (RSUs) cash-settled;
- Discounted shares;
- Free shares;
- Matching shares;
- Employee Share Purchase Plans which fall outside share option legislation;
- Restricted shares;
- Convertible securities;
- Forfeitable shares;
- Phantom shares;
- Stock Appreciation Rights;
- Other cash awards where the value is based on the value of specified stock;
- Growth/Hurdle/Flowering shares;
- Other shares.
This return will give the Irish Revenue more visibility on the operation of share schemes and how employees are remunerated. We expect that Revenue will use this information to determine if employers are operating payroll tax withholding properly on share-based remuneration.
For the 2020 tax year, it has been confirmed that companies do not have to provide details on the award or grant of RSUs. These details are optional. However, the company does have an obligation to disclose information relating to the vesting of RSUs which occurred in 2020.
If a company has a share option plan, these details should be included in the RSS1 return. They should not be included on the ESA return.
Deadline for ESA returns
The ESA return for 2020 must be submitted to the Irish Revenue by 31 August 2021. Prior to the deadline, companies should ensure that they are registered for Share Scheme Reporting in ROS (Revenue Online Service). This can take up to 3 working days. If a company is not registered for share scheme reporting, then it will not be able to submit an ESA return via ROS.
The ESA return for 2021 will have a filing deadline of 31 March 2022, similar to other share reporting returns.
If a company fails to make a return, or submits a false return, the Irish Revenue may impose a penalty of €3,000.
Format of the ESA return
The new ESA return is a pre-formatted spreadsheet which can be uploaded through the Revenue Online Service (ROS). This is a similar format to the existing KEEP1, RSS1 and ESS1 electronic returns.
If you have any questions in relation to the above, or if you would like assistance with the submission of the ESA return to the Irish Revenue, please contact a member of the employment tax team below: