Title page
Contents
Chair's Foreword 3
Abbreviations 9
Members 10
Terms of Reference 12
List of Recommendations 13
1. Introduction 17
Inquiry Overview 17
Report Outline 18
Employee Share Schemes in Australia 19
The current regulatory environment 19
The 2009 regulatory reforms 20
The 2015 regulatory reforms 22
Recent regulatory reforms 23
2. Understanding Employee Share Schemes 24
Employee Share Scheme benefits 25
Attraction and retention of talent 25
Support for jobs and businesses during crises 25
Higher productivity 26
Greater entrepreneurship 26
Fairer distribution of economic gains 27
Measuring usage of Employee Share Schemes in Australia 27
Lack of up-to-date data 28
Awareness of Employee Share Schemes 29
How does Australia’s usage of Employee Share Schemes compare to other countries? 30
Committee comment 31
3. Effectiveness of the 2015 reforms 34
Definition of a ‘start-up’ 35
No equity interests listed on a stock exchange 35
Aggregated turnover of less than $50 million 36
Exclusion of established companies 37
Valuation rules 38
Limited tax incentives 39
The $1,000 upfront tax concession limit 39
The $5,000 tax-deferred salary sacrifice plan limit 40
Ten per cent limit on ownership through an Employee Share Scheme 41
Cessation of employment as a taxation point 42
Retirement 44
Income tax withholding 45
Committee comment 46
4. Creating a conducive regulatory framework 49
Regulatory hurdles and exemptions 50
Disclosure exemptions 50
Small scale offer exemption 50
Public access exemption 51
On-sale obligations conditional relief 51
Licensing exemptions 51
Advertising exemptions 51
Hawking exemptions 52
‘Complex and fragmented’ exemptions 52
‘Employee Share Scheme’ definition 52
Complex disclosure statements 53
Limited scope and application of the exemptions 54
Privacy concerns 54
Laws versus regulatory frameworks 54
The Australian Taxation Office’s assistance for start-ups 55
The Australian Taxation Office’s reporting requirements 57
Inconsistencies in Employee Share Schemes’ tax treatment 58
Share buy-backs 58
Employee Share Scheme loan plans 59
Employee share trusts 59
Different tax treatment of shares and rights 60
Committee comment 61
A. Submissions 65
B. List of Public Hearings and Witnesses 67