Ireland: Publication of ESA form for new reporting requirements for sharing plans
As part of the new action plan reporting requirements introduced under the 2020 Finance Act, the Office of Irish Revenue Commission (“Irish Recipes“) posted the” Feedback from a company for job exchanges “(“ESA Form”) On June 22, 2021. The ESA form is available here.
In short, Form ESA requires companies that grant share-based awards, including restricted share units, convertible shares, redeemable shares, discounted shares (for example, purchase rights of ‘shares not treated as stock options for Irish tax purposes) and / or awards which offer the cash equivalent of shares to employees in Ireland to disclose certain information about such awards to Irish Revenue ( on an individual basis). The ESA form does not do not hedge stock options or stock purchase rights granted under an employee stock purchase plan that are treated as stock options for the purposes of Irish taxation; these rewards will continue to be reported to Irish Revenue via the RSS1 form (found here).
Businesses must initially electronically file the ESA form for the 2020 tax year (ending December 31, 2020) no later than August 31, 2021. For subsequent tax years, the ESA form must be submitted electronically by March 31 at the latest following the end of the applicable fiscal year (same deadline as for the RSS1 form).
- SEE AGAIN reward activity for employees in Ireland during the calendar year ended December 31, 2020.
- SUBMIT ESA form for activities to be declared during the calendar year ended December 31, 2020 no later than August 31, 2021.
- TO PREPARE for the submission of the ESA form and the RSS1 form for the activities to be declared during the calendar ending December 31, 2021, which will be due no later than March 31, 2022.
Share the programs impacted by the new ESA form
Prior to the publication of the ESA form, Irish Revenue did not provide any formal guidance or reporting form for certain types of awards, including restricted share units and restricted shares. However, the 2020 Finance Law, which was signed on December 21, 2020, made various changes to the tax reporting framework for share-based awards, including imposing new annual electronic reporting guidelines for award types. following:
- Restricted share units
- Restricted actions
- Convertible shares
- Confiscable shares
- Depreciated shares (e.g. shares acquired through stock purchase rights not treated as stock options for Irish tax purposes)
Scope of events to be declared according to the ESA form
Based on the guidance provided by Irish Revenue as part of the publication of the ESA form, some of the reportable events that should be entered on the ESA form include:
|Restricted stock units (RSUs)|
|Acquisition of RSUs (declaration of grant of RSUs is optional) Disposal of RSUs operated under a “sale to cover” scheme Right to or payment of dividends Forfeiture of RSUs settled in shares|
|Allocation of restricted shares Disposal of restricted shares before the end of the specified restricted period Expiration of restricted shares after the end of the specified restricted period|
|Reduced price actions|
|Allocation of reduced-price shares comprising counterpart shares, free shares and undervalued or reduced-price shares Dividend equivalents paid by the allocation of additional tranches of shares|
Deadline for submitting the ESA form
The deadline for submitting the ESA form will generally be March, 31st following the end of the fiscal year (ending December 31) in which the reportable events occurred. However, for the tax year ending December 31, 2020, employers must submit the ESA form to reflect reportable events that occurred during the 2020 calendar year. no later than August 31, 2021. Instructions and explanatory notes for completing and filing the ESA form electronically are included in the form itself, as well as the Irish Revenue Sharing Schemes Manual (which can be found here).
For more information regarding the preparation and submission of the ESA form, please contact your Baker McKenzie Compensation attorney.