24 May 2021
The Irish tax authority (the Revenue) has announced that it will soon be releasing a new electronic return for reporting share-based remuneration.
Current on-line reporting of share plan income
Although employers are already required to report all incentive-related income to the Revenue, currently the only specific reporting forms are for option plans (reported on form RSS1) and qualified share plans (ESS1 and KEEP1), all of which are filed on-line through the Revenue Online Service (ROS).
New reporting obligation
The Revenue is now extending mandatory on-line reporting to cover other types of incentive income including RSUs, restricted shares, convertible shares, forfeitable shares, discounted shares and any other award with the cash-equivalent of shares. The e-report for the new Employers Share Awards (ESA) return will be similar in format to the existing reports, which are set out in a pre-formatted spreadsheet which is uploaded through the ROS.
Timing and reporting deadline
The new ESA return is expected to be available in June, with the deadline for reporting for the 2020 tax year extended to 31 August 2021. For tax year 2021, and in subsequent years, the ESA return will have the same 31 March filing deadline as the other share plan returns. Companies which have not previously made e-filings through ROS, should first complete the registration procedure (which can take up to three business days), as only registered users have access to the on-line filing system.
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 return 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. The Revenue has confirmed that it will be releasing additional information over the next few weeks and we will let you know once the ESA return is available on the Revenue website.
The new reporting system feels reminiscent of the UK online reporting overhaul from a few years ago. That ran into teething trouble on deadline day as the online reporting portal collapsed. Many returns vanished and had to be submitted twice. This experience means we recommend early submission of the new Irish return to help avoid similar issues here!
We would like to thank one of our relationship firms in Ireland, A&L Goodbody, for alerting us to this update.
Please let us know if you have any questions about this new filing.
Chris Fallon and Sharon Thwaites