Taxation of employee share schemes for startups

simmondsstewart.com

The IRD has released its much-anticipated issues paper on taxation of employee share schemes for start-ups.
This is the third part of a substantial review undertaken by the IRD of the rules governing the taxation of employee share schemes. The first two parts involved:

Introduction of reporting rules, requiring employers to advise the IRD when shares and options are issued to employees, and when options are exercised; and

A Bill, currently before Parliament, that treats conditional employee share purchase schemes as if they were options for tax purposes. This means that employees will pay tax on the gains made through share purchase schemes in the same way that gains are taxed with option schemes.

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