Hi everyone, have a tax question here which I'm hoping those more knowledgeable than myself can help shed some light on.
Say an employer provides both Employee Stock Options (ESOP) & Employee Share Ownership (ESOW)s. I understand whilst there is no capital gains tax when you sell these at a profit, these are still taxed as part of income when the options are granted (or if there are vesting periods, the year in which they vest). I believe that the amount that qualifies for tax is basically the difference between the exercise price of the ESOP/ESOW vs the Open Market value, at the date of grant.
My question is this: what happens if the Open Market value (i.e. the stock price) falls significantly after this has been calculated for IRAS? As this would result in the employees (who did not sell the stock) having a much higher tax bill to pay, even though the stock has lost most of it's value (thus the actual income gained from the granting of the stock was much less than before). Is there a recourse for them, other than pursuing the Qualified Employee Equity-based Remuneration Scheme (QEEBR Scheme - link below) that allows for a tax deferment of up to 5 years (although there is variable interest charge)?
https://www.iras.gov.sg/taxes/individua ... ck-options
Appreciate any & all feedback/advice on the above!
