The Australian Taxation Office (ATO) has identified 216, or 35 per cent, of the 601 highest-paid executives of the top 160 listed companies that have employee share plans.
It believes they could have discrepancies relating to instances where tax is taken out of their employee share plans.
An ATO investigation of high-income individuals who earn more than $1 million has found employee share plans face tax risks, tax commissioner Michael D'Ascenzo told the Australian Institute of Company Directors yesterday.
"Of these, 216 have potential discrepancies relating to a cessation time, some over multiple tax years," D'Ascenzo said.
"While there may be various explanations for the discrepancies we are in the process of sending individual questionnaires to a test pool of 30 individuals seeking clarification.
"More questionnaires are being prepared."
The ATO is looking into remuneration and incentives such as shares, options and rights, cash bonuses and non-income capital benefits, a spokeswoman said.
It will compare information from annual reports, state government registries and share registries against tax returns.
"We will conduct audits where we identify a high risk of omitted or under-declared income," the spokeswoman said.
The ATO believes there may be a broader compliance risk for employees.
"[Employees] be unaware of the special income tax rules and CGT [capital gains tax] implications of employee share schemes," D'Ascenzo said.
Such schemes are taxed differently to normal shares and therein lies the danger, HLB Mann Judd accountant Andrew Yee said.
"They are complex in the way they are taxed and most people wouldn't know how the rules work," Yee said.
"They just get caught."
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