Thesis (M.Com. (Taxation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Accountancy, 2017 / Share incentive schemes have been used for many years as a mechanism to
compensate, retain and attract talent by offering employees a stake in the business.
Share incentives, however, usually contribute an increasingly larger portion of
executive pay in comparison with general employees. The motive for larger share
incentive based compensation is on the foundation that management must have a skin
in the game in order for their interest to be appropriately aligned with shareholders.
The Treasury and the South African Revenue Service (‘SARS’) have historically viewed
share incentive schemes with suspicion. Treasury and SARS consider these schemes as
salary conversion plans designed avoid tax. This has led to a litany of tax legislation
that has sought to combat this so called avoidance. As things stand it appears the
legislation is far too reaching and no longer reflects the commercial and economic
reality of an increasingly entrepreneurial world.
The aim of this research report is to ascertain whether the current tax policy is
effectively discouraging employee share ownership. This paper will consider the
impact of the current tax provisions on share incentive schemes for both the
employees and their companies’. The United Kingdom offer tax advantages for
employee share ownership plans thus the report will also include a comparison with
the tax legislation governing share option schemes in the UK. The comparison will aid
in recommending a more sensible and equitable way forward with regards to the
taxation of share incentive schemes in South Africa.
Key words:
Share incentive plans, Section 8B, Section 8C, executive remuneration, equity based
compensation / GR2018
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/24370 |
| Date | January 2017 |
| Creators | Isaacman, Allon Joel |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | Online resource (71 leaves), application/pdf |
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