The Government is trying to figure out a fairer tax regime for employee share schemes in start-up businesses.

An officials’ issues paper released on 30 May, ‘Taxation of employee share schemes: start-up companies’, outlines possible deferral rules for start-up companies in this position. The paper expands on a proposal raised last year.

The thinking is to make it possible to defer the taxation point for employees – with a corresponding deferral of the company’s deduction. The proposed deferral rules would delay the time of taxation to when the shares are sold or listed on a stock exchange.

The paper follows the development of new rules for taxing employee share schemes, as described in the Taxation (Annual Rates for 2017-18, Investment and Employment Income, and Remedial Matters) Bill, introduced on 6 April this year.

The issues paper is looking for submissions about the design of a deferral scheme. This means you can present your ideas on the scope, nature and timing, deductions, administration and compliance of any deferral scheme. More especially, you might want to think about whether it will affect your business. If it does, we’re happy to help you with your submission.

Submissions may be sent to:

policy.webmaster@ird.govt.nz
with ‘Taxation of employee share schemes: start-up companies’ in the subject line.

The closing date is 12 July 2017.
Source: www.taxpolicy.ird.govt.nz