The draft QWBA addresses when an employer can claim a deduction for the deemed expenditure that arises as a result of providing an employee with a benefit under an employee share scheme.
It also addresses when deemed income will arise for the employer if the employee has a loss (e.g. the share value is less than the consideration paid). In this case, the employee is entitled to a deduction.
Put simply, the deemed expenditure is deductible at the same time the employee recognises the income. Deemed income for the employer arises when the employee can claim a deduction.
As part of our submissions Chartered Accountants Australia and New Zealand:
- Recommends the document be simplified if the ‘QWBA’ format is retained,
- Notes that in our view there is no uncertainty regarding timing, and
- Make suggestions to improve the first example of the draft item.