ESR review of startup share scheme taxes should address employee liquidity challenge: observers
Staff are often taxed before they can realise the value of their equity, weakening such ownership plans
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[SINGAPORE] A review of Singapore’s tax framework for employee share schemes could make startups more attractive to specialised talent by ensuring staff are taxed only when they are able to realise the value of their equity, observers said.
Their comments follow the recent release of the Economic Strategy Review (ESR) committee’s final report, which elaborated on 32 recommendations first outlined in an executive summary published in May.
As part of its proposals to foster a more dynamic enterprise ecosystem – where more Singapore-based companies can start, scale and succeed globally – the committee suggested reviewing the taxation framework for employee share option plans (Esops) and other employee share ownership schemes.
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