Calculating RTSO1 Liability

A

Azerbaijani

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Hello!
I recently purchased shares using an ESPP Plan offered by my company. I need to declare taxes using the RTSO1 form, but I am unsure on how to calculate the liability. My total annual income is >35.000€ therefore my Income Tax is 20%. Should I use that 20% Income Tax to calculate the Liability? Most examples I found online use 40% Income Tax.
I would be very grateful for every answer.
Thank you in advance.
 
Can't imagine you have a liability on purchasing company stock.
The liability is usually on selling and the RTSO is usually for income tax on options granted free to you by your company.
Additionally ESPPs are Revenue approved thereby you must hold onto them for a fixed period, 3 years I think is normal.
I would look at the T&Cs of your scheme but from what you posted would not accrue any liability for tax now.
 
Hey Paul! Thank you very much for your answer.
According to the documentation that my company provides, I should declare Tax when the purchase option is exercised. The taxable amount would be the difference between the Fair Market Value at the time of the purchase and the actual purchase price. Shares are purchased with 15% discount in my case.

Since the plan is an unapproved share scheme, I do think that I need to declare and pay taxes. Here is a description on the revenue website: [broken link removed]
Sadly, the page does not clarify the Income Tax that can needs to be used to calculate.

I would be very grateful for any further advice.
 
You'll need to pay income tax, USC and PRSI on the 15% discount within 30 days of the purchase date, regardless of whether you then sell the stock or not. Some companies payroll departments will handle this tax payment for you from your payslip, others won't and you'll have to calculate the liability yourself and make a RTSO1 submission and payment. See this post on how to do that. Note that if the stock price increases between the purchase date and the date you sell and the overall gain is more that €1270 you'll have to pay CGT of 33% of the gain over €1270. The actual stock price on the purchase date, not the discounted price you got, is what's used to calculate this gain.
 
I presume you mean't to write My total annual income is <35.000€ (less than). Then Cold warrior has it spot on. The 15% discount is effectively salary on top of your normal annual pay, so needs to be taxed as PAYE. At year end you'll need to return a Form11 via ROS is simplest.
 
To pay at the standard rate (20%), you must apply in writing to Revenue. See link below under Tax Due


[broken link removed]
 
Azerbaijani said:
Hey Paul! Thank you very much for your answer.
According to the documentation that my company provides, I should declare Tax when the purchase option is exercised. The taxable amount would be the difference between the Fair Market Value at the time of the purchase and the actual purchase price. Shares are purchased with 15% discount in my case.

Since the plan is an unapproved share scheme, I do think that I need to declare and pay taxes. Here is a description on the revenue website: [broken link removed]
Sadly, the page does not clarify the Income Tax that can needs to be used to calculate.

I would be very grateful for any further advice.
Click to expand...
Ah unapproved, looks like you got the right answer from other posters.
 
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