Corporation Tax

Landlord’s Tax Relief Ireland, Residential Premises Rental Income Relief, RPRIR

Are you an individual landlord of rented residential property in Ireland?

If so, this nine page Revenue guidance material published today may be of interest to you, especially if you are a non-resident landlord.  In general, non-resident individuals are not entitled to any personal tax credits, reliefs and/or deductions. Section 1032 TCA 1997, however, provides that in certain circumstances, a portion of the credits, reliefs or deductions may be available, which is calculated by the ratio the Irish source income bears to the individual’s total income.

Are there any scenarios in which a clawback of the Relief may arise?

Section 4 of this Revenue guidance manual sets out the circumstances in which a clawback will arise:

The relief will be reclaimed in the following situations:

1. If the landlord ceases to be a landlord of a qualifying premises within four years of the first year in which relief is claimed. This may arise because the residential rental property is sold or gifted or because the landlord has removed it from the rental market

2. If the property is not rented to a tenant and is not actively listed for rent.

3. If the property’s use changes from a residential letting to say, a holiday home or a short-term letting.

4. If the property is rented to a connected person or a relative.

Important points to keep in mind:

• In circumstances where the landlord no longer qualifies for the RPRIR, a Revenue officer will amend the assessment for each year of assessment where the relief was claimed.

• The tax clawed back will not exceed the amount of relief actually claimed.

• The relief will not be clawed back in circumstances where the landlord dies during a year of assessment.

For further information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-03-04.pdf

If you are a landlord of rented residential property in Ireland seeking comprehensive tax advice or looking to regularise your tax affairs, and wish to deal with a Property Taxes Specialist please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Finance Bill 2025, Increased Revenue Powers, Income Tax and Corporation Tax

The Minister for Finance, Paschal Donohoe, published Finance Bill 2025 today, 16th October 2025, giving effect to the tax measures announced in Budget 2026 of last week.

Section 31 of the Bill introduces a new Section 959AX TCA 1997 to Part 41A TCA 1997.

This legislation gives the Revenue Commissioners the authority to estimate corporate and income tax liabilities and serve notice in writing specifying the estimated tax due in circumstances where the taxpayer fails to file the required Tax Return within the specified return date. The estimated figure will be based on the higher of (i) the average amount of tax due on the two most recent tax returns, or (ii) €1,000.

Section 90 of the Bill amends the wording in Section 811C (4)(a) TCA 1997 

This strengthens Revenue’s powers to counteract tax avoidance by expanding the scope of the legislation.  The amendment extends and enhances the Revenue Commissioners’ authority to withdraw or deny, at any time, tax advantages arising from tax avoidance transactions.  It specifically pertains to situations where an individual either takes or fails to take any other action, which directly or indirectly, seeks to obtain a tax advantage as a result of a tax avoidance transaction.

Section 93 of the Bill amends Section 638A TCA 1997.  

This extends the transfer of rights and obligations under company mergers or divisions to include those arising under Part 4A TCA 1997. It provides that the Pillar Two compliance obligations, including tax payments and filings, will transfer to the successor company or companies, under a merger or division.

Section 94 of the Bill amends Section 869 TCA 1997

As you’re aware, Section 879 TCA 1997 provides that the Revenue Commissioners may issue a notification to a taxpayer requesting that individual to deliver a tax return, in any tax year. Section 94 of the Bill amends Section 869 TCA 1997 allowing Revenue to issue such Income Tax Return Notices electronically i.e. via MyAccount or ROS.

Section 95 of the bill amends Section 959AA of the TCA 1997

This amendment expands the Revenue Commissioners’ power to make or revise a tax assessment outside the standard four year time limit, so as to give effect to a Mutual Agreement Procedure outcome under a Tax Information Exchange Agreement, by virtue of section 826(1B) TCA 1997. Currently, under existing rules, a Revenue officer is allowed to make such an extended assessment in circumstances where a MAP is reached under a double taxation agreement.

Section 98 amends Section 959I TCA 1997

Section 98 amends Section 959I TCA 1997 by inserting a new subsection 6 to clarify that a “chargeable person” may still make a claim for an allowance, deduction or relief even where that tax return is filed after the specified deadline date, unless, another provision in the Taxes Acts explicitly prevents the making of such a late claim.

For further information, please click: https://www.gov.ie/en/department-of-finance/press-releases/minister-donohoe-publishes-finance-bill-2025/

If you have received a notification of a level 1 or 2 Revenue Compliance Intervention or a level 3 Investigation into your or your company’s tax affairs, and wish to deal with a Revenue Compliance Tax Specialist, please contact us.  We also carry out tax health checks for companies and individuals to assist in identifying potential areas of exposure. For a full professional taxation advice and compliance service from qualified and experienced Chartered Tax Advisors, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Tax Credits. Budget 2026 Ireland. Income Tax. Personal Taxes. Tax Reliefs

Budget 2026 introduced a wide range of updates across Ireland’s tax system. The following Tax Credits and Reliefs are being extended:

1. The Rent Tax Credit is being extended for a further three years.  It is due to expire at the end of 2028.

For further information, please click link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx

2. The income tax deduction for landlords retrofitting properties is extended for another three years.  It is available for works carried out up to 31st December 2028.

For further information, please click link: https://www.revenue.ie/en/property/rental-income/deduction-for-retrofitting-expenditure/index.aspx

3. The Income Tax Exemption for households which sell electricity from micro-generation back to the grid is extended for a further three years to 31st December 2028.

For further information, please click link: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-44.pdf

4. The Mortgage Interest Tax Relief is being extended for a further two years. Relief will be available at the standard Income Tax rate, with the maximum 2025 relief capped at €1,250 per property and €625 per property for 2026.

For further information, please click link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/mortgage/index.aspx

5. The USC Concession for medical card holders will be extended until 31st December 2027.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

6. The €5,000 Vehicle Registration Tax (VRT) Relief for new electric vehicles is extended until 31st December 2026.

For further information, please click link: https://www.gov.ie/en/department-of-finance/speeches/statement-by-minister-donohoe-on-budget-2026/

7. Employee Benefit-in-Kind Relief for employer provided vehicles (for cars in categories A-D and to all vans) is to be extended, on a tapered basis, until the end of 2028.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

8. Special Assignee Relief Programme (SARP) has been extended by 5 years to 2030.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

9. Key Employee Engagement Programme (KEEP) has been extended to 31st December 2028 subject to approval from the European Commission.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

10.Foreign Earnings Deduction (FED) has been extended by 5 years to 2030.

For further information, please click link: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

Accounts Advice Centre provides a top tier level service for all personal income tax matters, from filing tax returns to offering specialist advice on complex taxation issues. We have over thirty years experience providing expert tax advice, tailored for individuals and their families. For a full professional taxation advice and compliance service, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Budget 2026. Business Taxes. Corporation Tax. R&D Tax Credits. Corporate Taxation. Capital Gains Tax.

Today, Tuesday, 7^th October 2025, the Minister for Finance, Paschal Donohoe and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, Jack Chambers presented Budget 2026.  In this series of articles, we have outlined some of the tax changes which we consider most relevant under the following headings (a) Personal Tax, (b) Business Taxes including Capital Gains Tax, (c) VAT, (d) Housing/Property, (e) Agri-taxation, (f) Investments and (g) Global Mobility and Employment.

BUSINESS TAXES

• As you’re aware, the Revised Entrepreneur Relief provides for a 10% rate of Capital Gains Tax on certain gains arising from the disposal of qualifying business assets. Previously, the lifetime limit was €1 million.  Today, the Minister announced that the lifetime limit on capital gains qualifying for CGT Revised Entrepreneur Relief will be increased to €1.5 million, from 1^st January 2026.

• A new exemption from the 1% stamp duty on acquisitions/transfers of shares in Irish registered companies is being introduced. It will apply to the shares of companies with a market capitalisation of below €1 billion that are admitted for trading on certain regulated markets. It will replace the existing stamp duty exemption for companies trading on the Euronext Growth Market.  The exemption is set to expire on 31^st December 2030.

• Previously, Special Assignee Relief Programme (SARP) was an income tax exemption for assignees of 30% of their relevant employment income between €100,000 and €1 million, provided certain criteria were met.  Budget 2026 extended the Special Assignee Relief Programme (SARP) for a further five years, to 31^st December 2030.   From 1^st January 2026, in order to qualify, new claimants of the Relief must have a minimum annual salary of €125,000.   This amendment will not affect existing claimants.  They can continue to avail of SARP, as before, in 2026 and further relevant years.  Finance Bill 2025 is expected to outline the simplification of certain relevant administrative requirements.

• Foreign Earnings Deduction (FED) relief has been increased to €50,000 from 1^st January 2026 and extended for a further five years, to 31^st December 2030.  The Philippines and Turkey have been included in the list of qualifying countries.  Finance Bill 2025 is expected to outline administrative amendments.

• The Key Employee Engagement Programme (KEEP), which was due to expire on 31^st December 2025.  Finance Bill 2025, however, will provide for an extension to this Income Tax exemption until the end of 2028, subject to European Commission approval.  KEEP provides for an exemption from Income Tax, Universal Social Charge and PRSI for any gain arising on the exercise of a share option by a qualifying individual in a qualifying company.

• Budget 2026 announced that the Research & Development (R&D) tax credit will rise to 35%.  The first year payment threshold will increase from €75,000 to €87,500.  An administrative simplification measure was also announced. This will allow 100% of an R&D employee’s emoluments as qualifying costs where at least 95% of that individual’s time is spent on qualifying R&D activities.  This update will provide more certainty and a reduction in administration for companies.

• The Digital Games Tax Credit, which provides for a 32% credit on qualifying expenditure up to €25 million, is being extended by six years to 31^st December 2031. Eligibility is being expanded to allow claims in relation to certain post‑release activities which are subject to qualifying conditions as well as EU approval.

• The Section 481 Film Tax Credit, which currently provides for a 32% credit on qualifying expenditure up to €125 million on certain productions, has been enhanced to provide a new 40% rate for productions with a minimum of €1m of eligible expenditure on relevant visual effects work, up to a maximum of €10 million eligible expenditure per production.  As the Film Tax Credit is an approved State aid, the enhancement measure will be subject to EU approval.

• Finance Act 2024 introduced a Participation Exemption for foreign dividends received, on or after 1^st January 2025, from subsidiaries in EU/EEA and double tax treaty partner jurisdictions.  Today, the Minister announced that several changes to the exemption will be provided for in Finance Bill 2025.  These include (i) broadening the geographic scope beyond dividends paid from subsidiaries in the EU/EEA and double tax treaty partners to include qualifying dividends received from jurisdictions that apply a non-refundable dividend withholding tax.  Other changes include (ii) reducing the period for which companies must have been resident in a jurisdiction within the geographic scope of the relief from five to three years, before paying a dividend, as well as (iii) providing clarification that the acquisition of a shareholding is not deemed to be the acquisition of a business asset for the purposes of the exemption.

• Following an extensive consultation, an action plan for the reform of Ireland’s taxation regime for interest was published today.  The primary request of stakeholders, arising from public consultation, was for a fundamental reform of the framework for the taxation and deductibility of interest.  The Action Plan sets out the timeline for phase one and nine other areas for potential reform under future phases are identified.  The main proposals put forward include: (a) an alignment of the tax treatment between trading and passive interest income, (b) the introduction of a renewed and simplified test for the deductibility of interest for corporation tax purposes as well as (c) the widening of the scope of interest deductibility to include ‘interest equivalents’.

• An extension to the Accelerated Capital Allowances schemes for energy efficient equipment until 31^st December 2030 was announced today.  This provides for an accelerated deduction of 100% in year one for business expenditure incurred on certain energy efficient equipment.

• The Accelerated Capital Allowances Scheme for Gas Vehicles and Refuelling Equipment was also extended to 31^st December 2023.

• The Minister announced that a public consultation on withholding tax will be launched soon to explore opportunities to modernise, digitalise and further expand the scope of withholding taxes.  A joint Department of Finance and Revenue public consultation is expected to be launched soon.

For further information, please click: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

At Accounts Advice Centre, we provide accurate and professional tax advice so you have the full and complete information you need to make the right decisions for you and your business.  We ensure your accounts and tax returns comply with the correct accounting standards and tax requirements.   To discuss what we can do for you with a qualified Chartered Tax Adviser, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Corporation Tax Returns. CT1 Forms. Business Tax Advisors. Tax Deadline

On 27th August 2025, Revenue updated the The Tax and Duty Manual Part 38-02-01 to include links to the following Tax and Duty Manuals:

1. Completion of Corporation Tax Returns Form CT1 2024
2. Completion of Corporation Tax Returns Form CT1 2023

If you require assistance filing your CT1 Forms, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Research and Development, R&D Tax Credit, Corporation Tax. Revenue Audits

The Research and Development Tax Credit provides a 30% tax credit for all qualifying R&D expenditure.  It increased from 25% to 30% for accounting periods commencing on or after 1^st January 2024.  There is expected to be a further increase in Budget 2026.  It’s important to keep in mind that this tax credit is available in addition to the corporation tax deduction available for expenditure incurred on R&D.  Therefore, this can result in an effective tax saving of 42½%; being a 12½% corporation tax deduction plus a 30% R&D tax credit.

So, what is Research and Development (R&D)?

The Revenue Commissioners have outlined criteria, in their guidelines, to enable companies determine whether their activities qualify for the tax credit.

According to Revenue’s most recent guidance material, “to qualify for the R&D Tax Credit, a company’s R&D activities must:

1. involve systematic, investigative or experimental activities

2. be in the field of science or technology

3. involve one, or more, of the following categories of R&D:

• basic research
• applied research
• experimental development

4. seek to make scientific or technological advancement and

5. involve the resolution of scientific or technological uncertainty.”

For further information please click https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-29/29-02-03.pdf

Qualifying R&D expenditure includes:

• qualifying operational R&D costs and

• qualifying R&D plant and equipment costs

• There is also a separate R&D tax credit in relation to buildings and structures.

Recent Amendments

• On 13^th January 2025, Revenue updated their guidance material. Section 766C TCA 1997 was amended to increase the first instalment threshold amount from €50,000 to €75,000, in relation to accounting periods commencing on/after 1^st January 2025.

• On 7^th July 2025, Revenue released a four part video, providing guidance on how to complete the R&D panels in the 2024 CT1 Form.

R&D Video Guidance

Did you know that the Revenue Commissioners have released a four part guideline video on the completion of the Research & Development (R&D) panels on the Form CT1 2024?

The videos focus on:

1. Part 1 shows you how to correctly complete the sections for grants and subcontractor costs.

2. Part 2 shows you how to complete the relevant panels on the Form CT1 in relation to instalments from 2022 and 2023. It also covers how to claim for carried forward amounts under section 766(4B) TCA 1997.

3. Part 3 shows you how to make claims under section 766C TCA 1997.

4. Part 4 shows you how to claim group relief. It also outlines some of the common errors in the R&D panels that may arise when completing the 2024 Form CT1.

Please click link: https://www.revenue.ie/en/companies-and-charities/reliefs-and-exemptions/research-and-development-rd-tax-credit/how-to-videos.aspx

Based on our professional experience, in recent years, the Revenue Commissioners are increasingly carrying out audits in relation to a R&D tax credit claims.  Accounts Advice Centre provides a full and comprehensive audit support service.  For further information, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

US Taxes, USA Business Tax provisions, One Big Beautiful Bill

On 4^th July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law.  It introduced several updates to federal informational reporting requirements.

1099-MISC and 1099-NEC

• It significantly raises the reporting threshold for payments made on Forms 1099-NEC and 1099-MISC.

• From 1^st January 2026, businesses will only be required to file a 1099 if their non-employee or miscellaneous income exceeds the threshold amount of $2,000.

• For those individuals working on a freelance or independent contractor/consultancy basis, it’s important to remember that you must report earnings, on your Form 1099-NEC, which have not been reported on form W-2.

• For consultants/contractors/freelancers is also important to keep in mind that while your clients won’t be sending you a 1099-NEC in relation to payments of under $2,000, you’re still responsible for reporting that income in your tax return.  For the client, however, it means that if they pay a contractor/consultant/freelancer less than $2,000 in a calendar year, the general rule is that they won’t be required to issue a Form 1099-NEC.

100% Bonus Depreciation

The One Big Beautiful Bill permanently restores the 100% bonus depreciation for qualifying business property placed in service, on/after 19^th January 2025.  Please be aware, however, if your business had a contract to acquire property prior to 20^th January 2025, the property will not qualify for the 100% bonus, even in situations where the actual acquisition happens after that date.

What is “Bonus Depreciation”?

It’s an additional first-year depreciation to incentivise businesses to invest in qualifying property.  

What does “placed in service” mean?

It means that the asset must be ready and available for its intended business use. For clarity, if you have purchased or financed equipment but it’s not ready and available for the intended business use, then it will not trigger the allowable deduction.

How is “qualifying property” defined?

Qualifying property includes property used in a trade or business or for the production of income and meets the following criteria:

• It must be tangible.

• It must be depreciable under the Modified Accelerated Cost Recovery System (MACRS)

• It must have a recovery period of 20 years or less.

• It must be placed in service after 19^th January 2025

• It can be purchased new or second hand.

• It includes computer systems, equipment, furniture, machinery, certain vehicles, etc.

• The phase-down percentages still apply to some assets, including property that was acquired on/before 19^th January 2025, even if it wasn’t placed in service until after that date.

• The Bonus Depreciation is not limited by taxable income.  Therefore, it can create or increase a net operating loss.

Enhanced Section 179 Deduction Limits

As you’re already aware, under Section 179 businesses can deduct the full purchase price of “qualifying property” during the tax year as opposed to capitalizing the expenses and depreciating them over several years. The new legislation introduced on 4^th July 2025, gives a major boost to the Section 179 deduction.  Under the previous limits for the 2025 tax year, businesses could only expense up to $1.25 million in qualifying property using Section 179.  Beginning in 2025 tax year, the increased deduction limit for certain depreciable business assets has doubled to $2.5 million.

With regard to the Higher Phase-Out Threshold, the deduction starts to phase out for total qualifying property costs over $4 million.  The previous limit was $3.13 million.

In summary, businesses can now deduct up to $2.5 million until their equipment purchases exceed $4 million.  Once purchases reach $6.5 million, the deduction phases out completely.

The OBBBA enhances section 179 expensing for tax years starting after 31^st December 2024.  This means that the changes will apply retroactively to qualifying property placed in service on or after 1^st January 2025.

What’s the difference between Bonus Depreciation and Section 179?

While you may think the 100% bonus depreciation is similar to a Section 179 deduction, you must keep in mind that Section 179 only allows eligible purchases up to $2.5 million to be fully expensed (with a phase-out once purchases exceed $4 million) while there is no dollar limit on the Bonus Depreciation.

For further information, please click: https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

If you are seeking a comprehensive and professional U.S. tax advisory of compliance service from U.S. Tax Specialists, including U.S. tax filing, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Income Tax Returns, Corporation Tax Returns, Level 1 Compliance Intervention, Revenue Non-Filer

As part of the Irish Revenue Commissioners’ Annual Non-Filer Programme, Notices will be sent to taxpayers who are currently registered for Income Tax or Corporation Tax but who have not filed Income Tax or Corporation Tax Returns for tax years up to and including 2023.  Tax Agents will receive a ROS Inbox Notification on 31^st January 2025 providing them with a list of clients who have been issued with a Reminder to File Notice.  Please be aware that this notice is what is deemed to be a Level 1 Compliance Intervention.

If you have received a Notice but you are no longer considered to be a “Chargeable Person”, the advice is to cancel your Income Tax or Corporation Tax registration as soon as possible.

For full information on who is deemed to be a “Chargeable Person” please click:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-41a/41a-01-01.pdf

According to Revenue’s “Reminder to file – Income Tax Return” Notice:

“This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return by chargeable persons can result in a penalty charge and a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

In addition, if the tax return(s) is not filed it may lead to the loss or refusal of tax clearance.”

According to Revenue’s “Reminder to file – Corporation Tax Return” Notice:

This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return can result in a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. It can also result in the restriction of certain reliefs, and the loss or refusal of tax clearance. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

For further information, please click:

https://www.revenue.ie/en/tax-professionals/tdm-wm/compliance/returnscompliance/it-and-ct-returnscompliance/income-tax-and-corporation-tax-non-filer-programme.pdf

If you receive a Level 1 Notification and you are required to file Tax Returns for outstanding years, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Business Tax. Corporation Tax. UK Taxes. Reliefs and Changes. UK Autumn Budget

Today, 30^th October 2024, the Chancellor of the Exchequer, Rachel Reeves, delivered the UK Autumn Budget.  She announced the publication of the Corporation Tax Roadmap.  In it, she confirmed that there would be no change to the current corporation tax rate, which is capped at 25%, until 31^st March 2027.  The Small Profits Rate and marginal relief will remain at their current rates and thresholds.  No changes will be made to other business tax areas including:

1. The current Patent Box and Intangible Assets Regime which will be maintained.

2. The Audio-Visual Expenditure Credit will be maintained.  The Video Game Expenditure Credit will also be retained.

3. With regard to Capital Allowances, full expensing for plant and machinery expenditure will be retained.  The £1 million Annual Investment Allowance will also be maintained.

4. 100% first year allowances for qualifying expenditure on zero-emission cars and electric vehicle charge points will be extended to 31^st March 2026.

5. In relation to R&D Reliefs, the current rates for the merged R&D Expenditure Credit Scheme as well as the Enhanced Support for R&D Intensive SMEs will be kept.

6. Support to the global taxation agreements under Pillar 1 and Pillar 2 will continue.

Business Tax Changes

• The Pillar Two Undertaxed Profits Rule will be introduced into law and will take effect from 31st December 2024.

• The Government have introduced changes to the taxation of Employee Ownership Trusts and Employee Benefit Trusts which will take effect from 30^th October 2024.

• For 2025/26, Retail, Hospitality and Leisure businesses will be given 40% relief on their business rates. The maximum amount available in relief each billing year is £110,000 per business.

• From 6^th April 2025, the special tax rules for Furnished Holiday Lets will be abolished. Individuals, corporates, and trusts who operate or sell furnished holiday lettings accommodation will be affected.

• Employer National Insurance contributions will increase to 15.0% from 6^th April 2025. The secondary threshold will be reduced to £5,000 per year, the Employment Allowance will be increased to £10,500 per annum while the £100,000 threshold will be removed.

• There will be further consultation on Transfer Pricing.

• Changes to the treatment of carried interest. From April 2025, the CGT rate applicable to carried interest will increase to 32%.

Anti-Avoidance Legislation

The Government have introduced new Anti-Avoidance legislation in respect to loans to participators.  From 30^th October 2024, these reforms will prevent shareholders from extracting untaxed funds from Close Companies. This new legislation is being introduced to prevent loans which are repaid and then reborrowed from associated companies from avoiding the s455 charge.

Also, from 30^th October 2024, the way in which capital gains are taxed when a Limited Liability Partnership is liquidated has been amended. It relates to situations where assets are disposed of to (i) a contributing member, (ii) a connected company or (iii) any other connected person.  The chargeable gain accruing to the contributing member will be computed as if the gain had arisen at the time they initially contributed the asset to the Limited Liability Partnership.

For further information, please click:

https://www.gov.uk/government/collections/autumn-budget-2024-tax-related-documents

For all your Irish, UK or cross-border business tax concerns, please contact us on queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Spanish Taxes. International and EU Taxes. VAT, Corporate Taxes, Capital Gains Tax

There are a number of alternatives open to individuals wishing to invest in Spain.  These include setting up a limited company or forming a branch / permanent establishment.  Due to the number of Irish clients with trading companies in Spain, we have prepared a general summary of the taxes arising. This is not a full and comprehensive guide to Spanish taxes.  It does not provide detail on the local operation of taxes.  As a result, we would always advise anyone with Spanish interests to seek the advice and expertise of a local tax professional.

RESIDENCE

Corporate tax is levied on the income of companies and other separate legal entities.  Spanish resident entities are liable to tax on their worldwide income, not just on profits from activities carried on in Spain.

What is a Spanish resident entity?

1. A company which is incorporated in Spain shall be regarded for the purposes of Spanish Corporate Tax as being resident in Spain under Spanish law.

2.  The location of central management and control in Spain may bring the entity into the Spanish Corporate Tax regime.  For example, if the legal headquarters/registered offices of the company are located in Spain, or if it is effectively managed from Spain, then the corporate entity is deemed to be Spanish resident.

3.  In the event of the legal entity being resident in a country where no taxation is levied on its profits or gains (i.e. a tax haven) then that entity is deemed to be Spanish tax resident if the following arise:

a)      The majority of the entity’s main assets are located in Spain.

b)      The entity’s principal business activity is carried out in Spain.

c)      The strategic control is exercised in Spain

It is important to keep in mind that the above point (i.e. number 3) will not apply if the entity exercises its management and control in another country.  This is  provided it does so for bona fide commercial reasons and not for the purposes of managing securities or other assets.

NON-RESIDENCE

Non-resident companies and entities are only liable to Corporate Tax on their Spanish income arising from business operations carried out by a Permanent Establishment within the jurisdiction.  Please consult Article 5 of the Ireland/Spain Double Taxation Agreement for a definition of Permanent Establishment.

Please be aware that a “Fiscal Representative” must be appointed by a non-resident individual or company, to correctly handle all tax affairs, when carrying out commercial activities in Spain.

TAX RATES

Corporate Tax

25% is the general tax rate for residents as well as non-residents carrying out commercial activities in Spain through a “Permanent Establishment.” Other tax rates may apply, however, depending on the type of company and the type of business carried out.

Where foreign companies have permanent establishments in Spain, Non-Resident Income Tax of 25% is chargeable on the income arising to the Permanent Establishment.

A reduced rate of 15% applies to newly incorporated entities set up on or after 1^st January 2015.  This preferential rate applies to the first two years of operation, providing a taxable profit arose in the first tax period.

This start up rate of 15% does not apply in the following situations:

1. Where the trade/business was carried on previously by a related entity.

2.  if the newly created company belongs to a Group of Companies.

3.  Where the company is considered, by law, to be an equity company.

For new companies set up prior to 1^st January 2015 they will be taxed at 15% on their tax base up to €300,000 with 20% tax being levied on any excess amounts.  This will apply for the first two tax periods.

Without a Permanent Establishment

When dealing with non-residents operating in Spain without a permanent establishment, but who are resident in another EU or EEA state with which there is an Information Exchange Agreement in place, a distinction should be made between an individual and a corporate entity.

The tax rate applicable in the above situation is 19% and the tax deductible expenses are calculated in line with Personal Income Tax and Corporate Income Tax legislation.

In all other situations, the general rule is that non-residents operating in Spain without a permanent establishment are taxable at a rate of 24%.

Capital Duty

A 1% Capital Duty is payable by the shareholders on the dissolution of a company or on a reduction in its share capital.

Dividends, Interest and Royalties

 Dividends paid to non-residents are liable to a 19% Withholding Tax unless a lower rate applies under a relevant Double Taxation Agreement.

It is also possible for an exemption to apply under the EU Parent Subsidiary Directive.  Distributions paid to E.U. parent companies by Spanish subsidiaries are exempt from withholding tax provided the parent company held, either directly or indirectly, at least a 5% holding in the subsidiary company for a continuous period of twelve months in addition to satisfying other conditions.

Anti-Avoidance legislation exists where the ultimate shareholder in not E.U. resident.

Following an amendment in the Spanish Personal Income Tax Legislation, a share premium distribution paid to a non-resident shareholder may now be treated as a dividend distribution liable to withholding tax under the general rules.

Interest paid to a non-resident including a non-resident individual is liable to 19% withholding tax unless a lower rate applies under the relevant Double Taxation Treaty.

Interest income is exempt from tax if the recipient is a resident of an E.U. member state or an E.U. Permanent Establishment of an E.U. resident company which is not deemed to be a tax haven.

Royalties paid to non-residents including a non-resident individual are liable to withholding tax of 24% or 19% if the recipient is resident in an EU or EEA member state where an Information Exchange Agreement exists.

This rate can be reduced by the provisions of a relevant Tax Treaty.

Royalties paid to associated EU resident companies or permanent establishments are exempt from tax in Spain providing certain conditions are satisfied.

Capital Gains

Under Spanish law capital gains are treated as ordinary business income taxable at the 25% corporate tax rate.

Capital gains on disposals by non-residents without a permanent establishment in Spain are taxed at a reduced rate of 19%.

Where non-residents without a permanent establishment dispose of real estate situated in Spain, a tax of 3% will be withheld from the sales price by the purchaser and paid over to the Spanish Tax Authorities to be offset against the vendor’s tax liability.

Capital Gains from the transfer of shareholdings/ownership interests in Spanish companies and foreign subsidiaries by corporate entities are exempt from tax if the conditions of Participation Exemption are satisfied.

For an E.U. corporate shareholder, ownership of at least 5% must be held directly or indirectly or the shareholding must be valued at over €20 million and it must be held for at least a twelve month period.

In situations where the company is non-resident, a foreign tax which is similar to Spanish Corporate Income Tax of 10% will apply providing the corporate entity is resident in a country with which Spain has concluded a Double Taxation Agreement.

VAT

Spanish VAT or IVA is charged on the supplies of goods and services within the Spanish VAT territory as well as on imports and intra-EU acquisitions of goods and services.

IVA is charged at 21% on the majority of goods and services in Spain.

There is a reduced rate of 10% which applies to certain goods and services such as the purchase of a newly built property, passenger travel, health products and equipment, toll roads, refuse collection and treatment, entrance to cultural buildings and events, some foodstuffs, water supplies, renovation and repair of private dwellings, agricultural supplies, hotel accommodation, restaurant services, etc.

There is a super reduced rate of 4% which applies to the basic necessities other than those classified under the 10% rate and these include human medicine, basic foodstuffs (i.e. bread, milk, cheese, eggs, fruit, vegetables, cereals, potatoes, etc.), books, newspapers and magazines except the electronic equivalents.

Sales Tax is applied in Ceuta and Melilla instead of VAT.

The Canary Island Indirect Tax or IGIC applies in the Canary Island instead of VAT.

The ordinary rate of IGIC is 7% but there are a range of other rates: 0%, 3%, 9½%, 13½% and 20%.

CHANGES TO VAT RULES

On 1^st July 2017 a new “Immediate Supply of Information” system took effect in Spain.

This new VAT management system now requires taxpayers to maintain their VAT books and records through the Spanish Tax Authorities website on a near real-time basis.

This new system is mandatory for all taxpayers who file their VAT Returns on a monthly basis including:

• Companies included in the VAT Grouping Special Regime.

• Large organisations whose annual turnover exceeds €6 million.

• Taxpayers registered on the VAT Monthly Refund  Registry (REDEME)

This new system, however, also enables Taxpayers to elect to use the S.I.I.  If they voluntarily choose to use this system then they must declare their intention on Form 036.

For further information, please click: https://sede.agenciatributaria.gob.es/Sede/en_gb/estadisticas/estadisticas-impuesto/declaracion-pais-pais-multinacionales-matriz-espanola/informe-pais-pais-2017.html

To speak with a Chartered Tax Advisor, specialising in Spanish Taxes, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.