Irish share scheme update - ESA Return

In June 2021 Revenue introduced a new update to the Share Schemes Manual and the Share Schemes Reporting Return, which brings an additional requirement for employers offering share-based awards to their employees.

The new Employer Share Awards (ESA) Return should include all share schemes (as well as certain cash-based schemes based on share value) which did not require specific year-end reporting up to this point.

Revenue have confirmed that the new ESA Return has been released on 21st of June. The deadline for electronic reporting of awards which were granted or became taxable during 2020 will be 31 August 2021. However, the deadline for awards granted or which became taxable during 2021 and subsequent years will be 31 March following the end of the tax year.

The new ESA Return now requires employers to report details of the following share plans and awards:

  • Restricted Stock Units (RSU) Share-settled and Cash-settled 
  • Discounted Shares
  • Free Shares
  • Matching Shares
  • Employee Share Purchase Plans (ESPP)
  • Restricted Shares
  • Convertible Securities
  • Forfeitable Shares
  • Phantom Shares
  • Stock Appreciation Rights
  • Other cash awards whose value is based on the value of specified stock
  • Growth / Hurdle / Flowering Shares
  • Other Shares

As discussed above, the reporting deadline for electronic filing of the ESA Return will be 31 August 2021 for share schemes where awards were granted or had become taxable during 2020.  For any schemes from 2021 onwards, reporting will be required on 31 March following the tax year in which the award is granted or becomes taxable.  

The ESA Return will not replace the existing share scheme reporting forms which employers may still be required to file (i.e. RSS1, ESS1, SRSO1, etc).  As such, the reporting requirement will increase with the introduction of the ESA Return. 

Further updates to the Share Schemes manual may follow in the next few weeks as Revenue will consider any feedback received on the above updates.  In the meantime, please do not hesitate to contact Suzanne O’Neill at RSM if you have any queries in relation to this reporting.

 

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