The Australian government announced on Friday that the current corporate tax treatment of options granted to employees in company share schemes is to remain unchanged.
Under current law, deductions are allowed only for certain qualifying options issued under employee share schemes.
However, proposed changes by the International Accounting Standards Board raised the question of whether a corporate tax deduction should be made generally available for the cost of options granted to employees. This would include the cost of options issued over unissued shares.
The Treasurer stated: “It is the Government's view that the current treatment should remain and that there be no new income tax deduction for the issuing of options.”
“Allowing a deduction for options issued to employees beyond the concessions currently available for employee share schemes would have a significant negative impact on Government revenue,” he argued.
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