AUSTRALIA: Submission to Australian Government on Proposed Change to Taxation of Equity Compensation - 24 SEP 2009
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Legal Alert
September 24, 2009
Submission to Australian Government on Proposed Change to Taxation of Equity Compensation
As
you know, the proposed legislation on taxation of equity awards in
Australia continues to work its way through the legislative process in
Australia. As you also know, we have commented on these proposed rules
and, in particular, have argued strenuously against taxing options at
vesting.
you know, the proposed legislation on taxation of equity awards in
Australia continues to work its way through the legislative process in
Australia. As you also know, we have commented on these proposed rules
and, in particular, have argued strenuously against taxing options at
vesting.
The
latest comment period set out by the Australian government relates to
the method of valuing equity awards. We have prepared proposed
comments on that as well, which you can view by clicking here.
We take another opportunity to point out the problems with taxing
options at vesting, but we also address the need to permit a
point-in-time valuation (e.g., closing price on the relevant day) of
shares which are traded on a recognized exchange, rather than the
quirky prior week's weighted average valuation method under current
law. The current method has not proven difficult for companies only
because they have not had to report the value of the shares to the
government. As you know, however, there will be an employer reporting
requirement for all awards once the legislation passes, even pre-July
1, 2009 grants, so employers will now be faced with the need to value
both options and shares that vest under RSUs or that are purchased
under ESPPs..
latest comment period set out by the Australian government relates to
the method of valuing equity awards. We have prepared proposed
comments on that as well, which you can view by clicking here.
We take another opportunity to point out the problems with taxing
options at vesting, but we also address the need to permit a
point-in-time valuation (e.g., closing price on the relevant day) of
shares which are traded on a recognized exchange, rather than the
quirky prior week's weighted average valuation method under current
law. The current method has not proven difficult for companies only
because they have not had to report the value of the shares to the
government. As you know, however, there will be an employer reporting
requirement for all awards once the legislation passes, even pre-July
1, 2009 grants, so employers will now be faced with the need to value
both options and shares that vest under RSUs or that are purchased
under ESPPs..
We
welcome any comments on our draft submissions and also encourage any of
you who are so inclined to sign on officially to our submission.
welcome any comments on our draft submissions and also encourage any of
you who are so inclined to sign on officially to our submission.
We
plan on submitting the comments during the first week of October, so we
would appreciate getting your comments and approval to sign on to our
submission within the next week (i.e., by October 1). Please provide your comments through this link.
plan on submitting the comments during the first week of October, so we
would appreciate getting your comments and approval to sign on to our
submission within the next week (i.e., by October 1). Please provide your comments through this link.
Thank you.
For More Information
Narendra Acharya, Chicago
June Anne Burke, New York
Edward Burmeister, San Francisco
edward.d.burmeister@bakernet.
Valerie Diamond, San Francisco
valerie.h.diamond@bakernet.com
David Ellis, Chicago
Jennifer George, San Francisco
jennifer.b.george@bakernet.com
Jennifer Kirk, San Francisco
Barbara Klementz, San Francisco
Bonnie Levitt, San Francisco
Brian Wydajewski, Chicago
Related Documents
Letter.pdf - 316.28 kb
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