Employer share scheme reporting obligations

Employers are obliged to report certain share scheme benefit provided to employees by the deadline of 31^st March 2022.  The transactions to be reported are for the calendar year 2021.

The share reporting form (Form RSS1) applies to share options, taxable under Section 128 TCA 1997. Section 128 applies to any right granted to an employee/ director by reason of their employment/ office to acquire any asset or assets including shares in any company.  The Form RSS1 requires details by employee of share options granted, share options exercised, consideration for share option assigned or released.

All other share awards, taxable under Section 112 TCA 1997, must be reported on the Form ESA, including:

• Restricted Stock Units (RSUs)
• Discounted/Free/Matching/ESPP shares
• Restricted Shares
• Convertible securities
• Forfeitable shares
• Phantom shares
• Growth, Hurdle, Flowering shares

Detailed information must be provided by employee specific to each type of scheme.

This information can be subsequently audited by the Revenue Commissioners and must be accurately provided.   We expect that information will be cross checked against information provided in payroll submissions and personal tax returns.  In the case of share options taxed under Section 128, it is the employee who reports and pays the personal tax arising on exercise of the share options.

The international aspects of share schemes are complex where employee either arrive in Ireland or depart from Ireland during the vesting period of share schemes.  The employer must determine the obligation to apply Irish payroll to the gain arising.  This is particularly relevant in the case of Restricted Stock Units (RSUs) where some concession can apply for a non-domiciled person who has both Irish and foreign workdays in the year.  Specific advice should be taken in such circumstances.

RSM Ireland can assist with any queries relating to the taxation or reporting of Share Scheme transactions.