Thesis (M.Com. (Taxation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Accountancy, 2014. / It is commonly understood that it is the people within the organisation that hugely affect the
efficiency and work environment, which ultimately brings about greater profitability and value. With
this in mind, corporate entities continue to ensure that they are attracting and retaining high
performing individuals to their organisations with the view of generating greater value for
shareholders. The question then arises as to how to attract key individuals to an organisation and
keep those individuals. The use of share incentive plans is an established tool implemented by
corporates which incentivises employees to remain at an organisation for an extended term while at
the same time, attempts to align the interest of the employee with that of the shareholders. Share
incentive plans provide one such solution of achieving both these objectives, but how practical is it
to implement such an incentive plan in light of the constantly changing tax landscape. Against this
commercial driver to attract and retain employees is the apparent mistrust by Treasury and SARS of
the use of share plans to incentive employees which is considered by Treasury and SARS as a salary
conversion plan with the objective of obtaining a tax advantage.
This paper will consider the practical issues faced by corporates trying to implement share incentive
schemes to secure the employee’s income earning structure for a prolonged period and aligning the
interests of the employee with the shareholders, by considering the tax influencers behind share
incentive plans which are being indirectly moulded by the tax legislation, drafted by National
Treasury and implemented by SARS. This report will consider the taxation of income earned qua
employee versus the income qua shareholder. In order to consider this the paper will attempt to
determine where the line currently rests between employee and shareholder, by providing an
outline of the current legislation around share plans and some of the commonly seen share schemes
implemented in practice. This paper will then consider the direction that this line is moving, if at all,
by considering the proposed changes to the legislation as drafted by Treasury and lastly consider
how these proposed legislative changes impacts corporates who are trying to implement a long term
share incentive plan.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/15227 |
| Date | 22 August 2014 |
| Creators | Hunt, Kirsten |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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