Annual employer reporting for share incentive plans
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.
Failure to submit the appropriate form can result in a penalty for the employer.
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 2019 RSS1 return is 31 March 2020.
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.
The deadline for submission of the 2019 KEEP1 return is 31 March 2020.
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, or within 30 days of a Revenue request. For prior years, the trustees of an APSS scheme filed a paper return. Beginning with the 2019 tax year, all ESS1 returns must be filed through ROS. In order to allow sufficient time to take the necessary actions prior to filing the ESS1 return, the 2019 filing deadline for the ESS1 has been extended from 31 March 2020 to 30 June 2020.
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 or within 30 days of a Revenue request.
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.
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:
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01 449 4451
01 449 4495
01 449 6457
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