23 June 2021
We previously issued an alert to notify you that the Irish tax authority (the Revenue) had announced that it would be releasing a new electronic return for reporting share-based remuneration.
The Revenue has now released the new template Employer Share Award return (Form ESA). The template is available on the Revenue’s website and can be found here. The new form must be filed online and is intended to capture all share-based awards (restricted stock units, convertible shares, forfeitable shares, discounted shares including purchase plans, and any other award with cash-equivalent of shares) that are not currently reported on a separate share plan return.
The template Form ESA includes notes for assistance with its completion. The Revenue has also released eBrief No. 120/21, which notes that various chapters of the Share Schemes manual have been updated to include reference to the Form ESA reporting requirements.
Timing and reporting deadline
The new reporting requirement applies for the tax year 2020 onwards. The deadline for reporting for the 2020 tax year has been extended to 31 August 2021. For tax year 2021, and in subsequent years, the Form ESA will have the same 31 March filing deadline as the Revenue’s other share plan returns.
Registration for share plan reporting
Companies that are not already registered for online share plan reporting with the Revenue's Online Service (ROS) must arrange to register now. If companies have been filing Form RSS1 (in relation to share options) and/or Forms ESS1 and KEEP1 (in relation to qualified share plans), then it is likely that they will already be registered for online filing. Whilst registering is a straight forward process, it can take approximately 3 days to complete.
Continuing payroll reporting obligations
This new reporting requirement for share plans is in addition to normal payroll reporting and withholding obligations. For example, if a company makes a share-based award (e.g. a free share award) to an employee today, the taxable benefit must still be reported through payroll as normal. The employer must then additionally report the award, using Form ESA by 31 March 2022.
As with all share plan reporting, we recommend that you prepare well in advance so you don’t get caught having to rush to find the required information as the reporting deadline looms. The scope of the Form ESA means employers with larger scale and/or more complex share incentive arrangements in Ireland must be prepared for a more time-consuming reporting process in this and future years. If you are not already registered to make e-filings through the ROS – you should start this process in good time prior to the filing deadline to avoid issues.
We would like to thank one of our relationship firms in Ireland, McCann Fitzgerald, for alerting us to this update.
Sally Blanchflower and Sonia Taylor