Share-based payments have become a popular form of employee remuneration, largely for its potential to address the agency problem and are especially effective when made to senior employees. Accounting standards require companies to report share-based payments made to employees as expenses in their financial statements, but extant South African tax legislation does not permit a deduction where shares are awarded to serve as incentives for senior employees. This is due to the fact that the courts do not view the issue of a company‟s own shares as “expenditure”. South African tax legislation presently contains a special tax deduction for shares awarded to employees, but this provision‟s low monetary limit and restrictive requirements are considered to be inadequate, where the intention is to provide adequate incentives to senior employees in order to address the agency problem.
The objective of this study is to evaluate whether sufficient grounds exist, based on the principles of sound tax policy, for the legislature to enact a special tax deduction for share-based payments, which would serve as an adequate incentive to senior employees. The evaluation found that the current tax position infringes upon several principles of sound tax policy and that an intervention by the legislature is required. / MCom (South African and International Tax), North-West University, Potchefstroom Campus, 2015
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nwu/oai:dspace.nwu.ac.za:10394/14244 |
| Date | January 2015 |
| Creators | Van Dyk, Herman |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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