October has been an important month for equity awards in Australia.

New Tax Rules

First, the Australian Government announced on October 14, 2014 that it would revise the tax rules applying to employee share plans.  The legislation still needs to be written and will most likely be effective only for grants made on or after July 1, 2015, but it seems clear that the taxable event for stock options will revert back to exercise (as it was the case for options granted before July 1, 2009).

This is great news for companies that had stopped granting options to employees in Australia after tax rules effective July 1, 2009 provided for tax at the time the awards were no longer subject to a substantial risk of forfeiture (typically at vesting). Apparently, the Australian Government finally realized its mistake after many companies aggressively lobbied for changes and pointed out that, by not being able to grant options, they were not able to compete with companies in other countries that are able to use stock options to incentivize employees.