Income tax 2016

Employee share scheme changes for start-ups: An opportunity for SMEs?

Source: Taxation In Australia Journal Article

Published Date: 1 Mar 2016


A growing business will often identify one or more key employees who are considered instrumental in driving the business. In order to retain and provide incentives to these key employees, the founder may wish to provide an equity interest in the business. This article examines why the current employee share scheme provisions under Div 83A of the Income Tax Assessment Act 1997 (Cth) are unsatisfactory for small-to-medium enterprises (SMEs).

The article also considers the new concessions for start-ups under the Tax and Superannuation Laws (Employee Share Schemes) Bill 2015 and what is needed for SMEs to reward their employees with equity in the most tax effective manner.

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Income tax 2016

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