Ireland: Changes for share options (2024)
Overhaul to method by which taxes owed in respect of employee share option gains are collected and remitted to the Irish Revenue
Overhaul to method by which taxes owed in respect of employee share option gains are colle
Ireland’s Finance Bill (No.2) of 2023—published 19 October 2023—set out proposed tax measures applicable from 1 January 2024. Read TaxNewsFlash
A significant amendment is an overhaul to the method by which taxes owed in respect of employee share option gains are collected and remitted to the Irish Revenue. From 1 January 2024, the collection method will become a real-time payroll withholding (PAYE) obligation for the employer. The extension of PAYE to share options is a significant change for employers that may never have had an obligation to operate PAYE on share-based compensation previously.
The move to the collection of employee liabilities on share option exercises through the PAYE system in such a short timeframe is likely to present several challenges for employers (at least until such time as appropriate processes and procedures have been developed to aid compliance with the new rules). The timeframe of under two months for employers to prepare for this new process is very tight, especially for companies with frequent grants and exercises of share options.
KPMG in Ireland discussed some practical considerations at a recent informal meeting with the Irish Revenue. Read a November 2023 report prepared by the KPMG member firm in Ireland
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