Tax policy officials consulted with other government agencies specifically The – Treasury, a number of units within the Ministry of Business, Innovation and Employment (MBIE) and Callaghan Innovation. Tax policy officials also contacted officials in Australia, the United Kingdom and South Africa to gain insights into the way they tax ESS. This has provided us with some useful guidance in terms of areas where New Zealand’s rules are consistent with the treatment in those jurisdictions and where we recommend deliberately departing from the approach in other jurisdictions for some reason for example, because our tax policy settings are different – (for example, we do not have a comprehensive capital gains tax) or because there are particular aspects of the laws of these jurisdictions that officials report are problematic. CONCLUSIONS AND RECOMMENDATIONS on the analysis above, the table below summarises the conclusions of the regulatory impact analysis. Area of reform Options Analysis against the objective and criteria Taxing employees’ income Option A status quo Does not meet the main objective – Option B tax employee on grant Does not meet the main objective – Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option C tax employee when the shares vest Meets the main objective – Preferred option Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option C2 same as Option C above, but tax options – Partially meets the main objective when they not when they are vest, exercised Neutrality  Equity  Compliance costs  Administrative  Integrity  Option D tax employee when they sell the shares Partially meets the main objective – Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Allowing deductions for Option A Status quo Does not meet the main objective – employers’ costs Option B Matching deduction Meets the main objective – Neutrality Preferred option  Equity  Compliance costs  Administrative costs  Integrity  Option C following IFRS Does not meet the main objective – Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option A status quo Does not meet the main objective –
Tax policy officials consulted with other government agencies – specifically The Treasury, a number of units within the Ministry of Business, Innovation and Employment (MBIE) and Callaghan Innovation. Tax policy officials also contacted officials in Australia, the United Kingdom and South Africa to gain insights into the way they tax ESS. This has provided us with some useful guidance in terms of areas where New Zealand’s rules are consistent with the treatment in those jurisdictions and where we recommend deliberately departing from the approach in other jurisdictions for some reason – for example, because our tax policy settings are different (for example, we do not have a comprehensive capital gains tax) or because there are particular aspects of the laws of these jurisdictions that officials report are problematic. CONCLUSIONS AND RECOMMENDATIONS on the analysis above, the table below summarises the conclusions of the regulatory impact analysis. Area of reform Options Analysis against the objective and criteria Taxing employees’ income Option A – status quo Does not meet the main objective Option B – tax employee on grant Does not meet the main objective Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option C – tax employee when the shares vest Preferred option Meets the main objective Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option C2 – same as Option C above, but tax options when they vest, not when they are exercised Partially meets the main objective Neutrality  Equity  Compliance costs  Administrative  Integrity  Option D – tax employee when they sell the shares Partially meets the main objective Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Allowing deductions for employers’ costs Option A – Status quo Does not meet the main objective Option B – Matching deduction Preferred option Meets the main objective Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option C – following IFRS Does not meet the main objective Neutrality  Equity  Compliance costs  Administrative costs  Integrity  Option A – status quo Does not meet the main objective