The assurance, tax and advisory firm said mid-size technology businesses in particular would greatly benefit from the use of a globally competitive employee share scheme. Grant Thornton said this would be an important vehicle to combat wage inflation, while helping businesses to secure the best talent to grow with the business.
“Such an amendment to our taxation legislation would result in a globally competitive situation where tax is payable at the time when employees exercise their rights to the share and have the opportunity to realise any gains, which coincides with a point in time where there is actually a tangible asset to tax,” said Simon Coulton, national head of technology and media at Grant Thornton Australia.
Current rules affect some firms' ability to attract and retain the best talent, according to Mr Coulton.
“Mid-size technology businesses are at a crucial stage of growth and are often missing out on retaining key executives because the current rules are a huge disincentive to providing “skin the game” to employees who have skills attractive to a worldwide market. Changing the rules is an important step to creating an even playing field for our local ICT sector," Mr Coulton said.
According to Grant Thornton, the federal government is currently considering changes to the employee share scheme.
“We welcome an initiative that will help our technology businesses grow and prosper in the local market, instead of moving offshore to seek more competitive tax environments for both the business and its employees,” said Mr Coulton.
Anticipated changes to the current rules are expected following the release of the National Industry Investment and Competitiveness Agenda later this year. Grant Thornton said businesses should consider current employee share scheme structures against any rule changes announced.
Are you thinking of expanding your offering into SMSFs to grow your client base? Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Earn up to 21 CPD hours! Learn more