Miscellaneous 2006

Cross border employee share and option plans: Distinguishing employment income from investor gains

Source: Australian Tax Forum Journal Article

Published Date: 1 Jan 2006

The tax treatment of benefits obtained under employee share and option plans is more complex than the taxation of many other forms of employee remuneration. There are at least five potential taxing points during the life cycle of the share or option and the gains realised can be characterised as either employment income or investment gains or both. When the benefits are subject to tax in more than one jurisdiction there is also the potential for double taxation or double non-taxation. The amendments enacted by Schedule 4 to the New International Tax Arrangements (Foreign-owned Branches and Other Measures) Act 2005 bring Australia’s treatment closer to the OECD model which recognises that the right to tax the employment income derived from employee shares and options is more correctly allocated on the basis of the days within the vesting period which are worked in the relevant jurisdiction.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Miscellaneous 2006

Share this page