Inland Revenue - Tax policy Tax Policy

News and information about the Government's tax policy work programme, including:
- proposed changes to the laws that Inland Revenue is responsible for
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Feedback sought on employee share scheme proposals

12 May 2016

An officials’ issues paper released today sets out proposals for taxing employee share schemes under New Zealand’s broad base low rate tax framework. The objective is for the tax treatment of employment income paid in shares to be consistent with the treatment of income paid in cash. For more information see the media statement and the issues paper. The closing date for submissions is 22 June.


Hon Michael Woodhouse
Minister of Revenue

12 May 2016

Media statement

Feedback sought on taxation of employee share schemes

An officials’ issues paper seeking feedback on the taxation of employee share schemes was today release for consultation, Revenue Minister Michael Woodhouse says.

Employee share schemes are arrangements that allow employers to provide shares and share options to their employees as part of their remuneration.

“Employee share schemes are becoming a much more popular form of remuneration, so it’s important the tax treatment of share schemes is fair,” Mr Woodhouse says.

“The proposals in the issues paper seek to modernise the rules, provide a clear basis for tax deductions and address the current under-taxation of certain complex share schemes.

“The current tax treatment can mean there is a lot of uncertainty about the rules and as a result, some people are under or over taxed. The issues paper aims to address that by ensuring tax rules don’t pose obstacles to the use of share schemes.”

The proposals released for public consultation have been developed to ensure that the taxation of employee share schemes is

  • simple, efficient and fair;
  • consistent with the taxation of salaries paid in case; and
  • fits well into New Zealand’s broad-based, low-rate taxation approach

The consultation document, Taxation of employee share schemes is available at www.taxpolicy.ird.govt.nz and submissions close on 22 June.