VAT

Cross Border Taxes, International Tax Consultants, GST, VAT, Goods and Services Tax, Ex-pat Taxes, Chartered Tax Advisors

As Chartered Tax Advisors in Ireland, you might be surprised to learn how many of our multi-jurisdictional clients have contacted us regarding the new GST rules in Malaysia.  According to Malaysia’s Ministry of Finance, the supply of goods and services made in Malaysia will now be subject to the zero rated Goods and Services Tax (GST) effective from 1^st June 2018.  The “Goods and Service Tax (Rate of Tax) (Amendment) Order 2018” amends the rate of tax on the supply of goods or services as well as on the importation of goods from 6% to 0%.

Please be aware that the zero rating will not apply to the supply of goods and services listed under the Goods and Services Tax (Exempt Supply) Order 2014.  However, these goods and services will remain exempt from GST.

All persons registered for GST (Goods & Services Tax) must comply with the new legislation in relation to zero rating. At the same time, they will continue to be governed by the current regulations with regard to invoicing, filing and claiming input tax credits.

GST registered persons must continue to ensure that the pricing of goods and services provided adheres to the Price control and Anti-Profiteering Act 2011.

In summary, Malaysia’s Ministry of Finance announced that from 1st June 2018, the supply of goods and services made in Malaysia, in addition to the importation of goods and services liable to the 6% rate of Goods and Services Tax will now be subject to GST at 0%.  It’s important that you don’t confuse the supply of goods and services which are GST exempt with those liable to 0% rate.  Therefore, for complete clarity, the zero rate does not apply to the supply of goods and services listed under the Goods and Services Tax (Exempt Supply) Order 2014.  This continues to be exempt from the Goods and Services Tax.

For further information, please click: https://mysst.customs.gov.my/assets/document/SST%20Act/Sales%20Tax%20Act%202018_b.pdf

We are a boutique tax firm specializing in international and expatriate tax compliance for people moving to or from Ireland. We provide tailored advice for your unique set of circumstances.  With over thirty years experience simplifying complicated international matters, we have a proven track record of success.  If you’re an individual (including a remote worker or expat) we have the requisite expertise in personal tax residency, double taxation relief and tax compliance for people moving between jurisdictions. We help individuals manage risks associated with tax residency, split-year treatment, cross border relief and foreign earnings deductions.  If you are a business owner, we can support your business in relation to international social security, shadow payroll and policies to minimise double taxation.  To make an appointment with a Chartered Tax Advisor, please contact 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.

VAT Advice. Tax Services for Staff Secondment. Global Mobility Tax. Foreign Companies. Employer Taxes and Payroll

Revenue eBrief 66/18, published on 23rd April 2018, contained guidance on the VAT treatment of staff secondments to companies established in Ireland from related foreign companies.  These guidance notes confirm that staff secondments are subject to VAT at the standard rate, being 23%. This applies even where both companies are connected and members of an international group.  Revenue, however, have provided a concession whereby VAT will not be charged on payments in relation to the seconded staff provided that correct Irish PAYE and PRSI (payroll taxes) have been operated on these payments.

This concessionary treatment will only apply in situations where the staff members are seconded from a company established outside Ireland but which is part of the same corporate group as the recipient company and where the staff are seconded to an Irish established company or an Irish branch of a foreign company. In addition, the Irish company to which the employee is seconded must exercise control over the performance of his/her duties or the secondee must effectively have managerial responsibility for the operation of the Irish company or Irish branch. Finally, the PAYE and PRSI liabilities relating to the payments to the seconded employee must be paid over to the Irish Revenue in a timely manner.

For further information, please click:  https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0662018.aspx

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. VAT. Capital Gains Tax. Tax Treatment of Rentals and Short-term lettings

Yesterday, Revenue eBrief No. 59/18 was published.  This comprehensive nine page document outlines the Income Tax. Capital Gains Tax and VAT treatment for income arising from the provision of short-term accommodation.

A short term letting is defined as a letting of all or part of a house, apartment or other similar establishment:

– to a tourist, holidaymaker or other visitor
– for a period which does not exceed or is unlikely to exceed 8 consecutive weeks

There are a number of different circumstances which will be covered by this new guidance material including

(i) persons staying in hotels, guesthouses, B&Bs, hostels, etc.,
(ii) persons either sharing a property with the owner or occupying the whole property for a short period of stay or
(iii) persons occupying self-catering holiday accommodation for short periods

If your rental income meets the criteria outlined in this document, you could be looking at an obligation to register for VAT depending on your turnover as well compliance obligations under Cases I or IV Schedule D.  In addition to the annual tax on the rental profits and the potential VAT exposure, you could encounter a Capital Gains Tax liability on the sale of the property generating this rental income which might otherwise have been tax exempt.

This document has clarified situations where Rent-a-Room Relief will not be available.  Specifically if you are someone who rents out one or more rooms in your home through online accommodation booking sites you will not be entitled to the Rent-a-Room Relief.  Instead you may be treated as if you are carrying on a trade with an obligation to register and account for Income Tax and/or VAT.

If you provide short term rentals to tourists, guests or visitors where the room or property is available for rent on a regular or frequent basis with a view to making a profit and involves you, the owner, carrying out some or all of  the following activities then you may be deemed to be carrying on a trade and if so, this document is relevant to you:

1. Advertising the property online on accommodation booking websites
2. Dealing with booking enquiries, reservations and payments
3. Arranging for cleaning, laundry and maintenance during and between lets
4. Providing meals
5. Providing information to visitors about local tourist attractions, restaurants etc.
6. paying staff to provide such services, etc.

According to this document:

“The provision of traditional short-term guest accommodation in hotels, guesthouses, B&Bs and hostels will generally constitute a trade. Persons who provide short-term guest accommodation, either in their home or in another property owned by them, will only be trading to the extent the activity is sufficiently frequent and regular and is carried on a commercial basis and with a view to the realisation of profit.”

For further information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-01-20.pdf

If you are renting out a room in your own home or an entire property using an online accommodation booking site and you are unsure of the correct tax treatment pertaining to your situation, why not contact us to discuss the matter further 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.

International Tax Advisors, VAT Experts, Cross Border Tax Consultants, Expatriate Tax Accountants

On Budget Day, 21^st February 2018, the South African Minister for Finance released updated draft regulations in relation to VAT levied on electronic services provided by foreign businesses.  The aim is to extend the definition of “electronic services” to include “any service supplied by means of an electronic agent, electronic communication or the internet…”

If enacted, the amended draft regulations could result in a significant overhaul of the VAT treatment electronic services.

In 2014 Section 89 of the Value Added Tax Act 1991 was amended.  From 1^st June 2014 on-wards the definition of “enterprise” was to include in the supply of electronic services provided by foreign suppliers to recipients within South Africa. As a result, non-resident suppliers of these services were required to register for VAT where their supplies exceeded the threshold amount of R50 000 in a twelve month period.

The amendments proposed in this Budget, which should take effect from 1^st October 2018, include the following:

• Repealing the current Regulation – This would allow for the deletion of the specific types of services currently outlined as “electronic services” and

• Revising the definition of “electronic services” to effectively include any type of service supplied electronically with the exception of telecommunication services and educational services provided by a person who is regulated by an educational authority in a foreign jurisdiction.

This new definition will bring into the South African VAT regime; foreign suppliers whose services were previously outside its scope, including online advertising, broadcasting, cloud computing, access to databases and information systems, etc.

The VAT Act does not, however, distinguish between Business to Business (B2B) supplies and supplies made directly to South African consumers (B2C). This will have a significant impact on the tax compliance burden for foreign suppliers who supply services electronically into South Africa as well as for the South African Revenue Service.

Amendments have been proposed for intermediaries and platforms to be allowed to register as vendors.  This will enable them to account for the VAT arising on sales made through such platforms providing the platform or intermediary facilitates the supply and assumes responsibility for the issuing of invoices and collection of the associated payments.

The National Treasury has allowed until 22^nd March to provide comments.  Following which, if the proposed amendments are enacted they will become effective from 1^st October 2018.

For further information, please click: https://www.sars.gov.za/businesses-and-employers/my-business-and-tax/newsletters/vat-connect-issue-8-march-2018/#:~:text=In%20the%20Minister%20of%20Finance’s,VAT%20rate%20to%20charge%20etc.

For all your cross border, expatriate and International tax queries, please contact us, to make an appointment with a qualified Chartered Tax Advisor, 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.

VAT. Tax Appeal. UK Taxes. International Tax Advice. Expat Taxes.

Nestlé has lost its appeal against the original 2016 ruling by the UK’s First Tier Tribunal over the VAT treatment that should apply to its strawberry and banana flavoured Nesquik powders.  The First Tier Tribunal found in favour of the HMRC not repaying the £4 million of output VAT which had been over declared by Nestlé on these products.  Nestlé’s grounds for seeking this repayment were that the fruit flavoured powders were liable to the zero VAT rate as they were deemed to be “a powder for the preparation of beverages.”

The Tribunal held in favour of the HMRC that the products in question should remain at the standard VAT rate and as a result, no claim for the over declared output VAT is to be allowed.

Nestlé argued that strawberry and banana Nesquik should be zero rated. The reason being that they encourage milk drinking and milk is zero rated.

Nestlé also argued that these flavours should have the same VAT treatment as the chocolate flavour powder because they are in essence, the same product.

Both Nestlé and the HMRC agree that the chocolate flavoured Nesquik should be zero rated on the basis that this product contains cocoa thereby allowing it to fall within the list of “exceptions to the excepted items” according to the UK’s zero rating provisions.

The Upper Tribunal pointed out that there are number of other anomalies within the VAT system. For example, the fact fruit salad is zero rated while fruit smoothies are liable to VAT at the standard rate.

This case is likely to be appealed by Nestlé.

The lesson to be learnt from this case is that VAT advice should always be sought in advance, especially with regard to new supplies, to ensure that the correct VAT treatment is always applied.

The full ruling can be found here:  Nestlé UK Ltd and the Commissioners for Her Majesty’s Revenue and Customs, [2018] UKUT 29, Appeal number: UT/2016/120 

For up-to-date Irish, UK and International VAT advice, 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.

Budget Ireland. Income Tax Changes. Business Tax amendments. CGT and CAT Reliefs and Exemptions, VAT

The Minister for Finance, Public Expenditure and Reform Paschal Donohoe T.D delivered his first Budget today, on 10^th October 2017, which concentrated more on expenditure than on tax changes.  The Minister announced a number of positive measures to assist small and medium sized enterprises prepare for “Brexit” as well as confirming Ireland’s commitment to the 12½% corporation tax rate. We are pleased to bring you our summary of the tax measures set out in Budget 2018 under (i) personal taxation, (ii) Income Tax, (iii) Capital Acquisitions Tax, (iv) Capital Gains Tax, (v) Business Taxes, (vi) VAT, etc.

PERSONAL TAXATION

Universal Social Charge

The USC has been cut for lower and middle income earners.

The 2.5% USC rate has been reduced by 0.5% to 2% and the band has been increased to €19,372 from €18,772 which will benefit employees earning the minimum wage.

The 5% USC rate has been reduced by 0.25% to 4.75%

Medical card holders and individuals aged 70 years and over whose combined income does not exceed €60,000 per annum will only be liable to pay a maximum USC rate of 2%.

For self-employed individuals with income of over €100,000 the 11% rate will continue to apply

Income Tax

The higher or marginal tax rate will remain at 40% for 2018.

The income tax standard rate band, however, will be increased by €750 to €34,550 i.e. the entry point at which the 40% income tax rate applies has been increased from €33,800 to €34,550 for a single person and from €42,800 to €43,550 for married couples with one income.

The marginal rate of tax for individuals earning between €34,551 and €70,044 will be 48.75%.

The marginal rate of tax for individuals earning in excess of €70,044 will remain at 52% for employees.

The marginal rate of tax for self-employed individuals earning in excess of €100,000 will remain at 55%.

Earned Income Credit

For self-employed individuals, the earned income tax credit will increase by €200 to €1,150.

No reference was made in today’s Budget speech as to when future increases to this tax credit would arise to bring it in line with the PAYE Tax Credit of €1,650.

Home Carer Tax Credit

The Home Carer Tax Credit will increase by €100 from €1,100 to €1,200.

The €7,200 income threshold remains

This tax credit can be claimed by a jointly-assessed couple where a spouse/civil partner cares for one or more dependents regardless of the number of individuals cared for.

Deposit Interest Retention Tax (DIRT)

The rate for Deposit Interest Retention Tax for 2018 will be charged at 37%.

PRSI

The National Training Fund Levy will be increased over the next three years and will apply to employees under Classes A and H by increasing Employer’s PRSI as follows:

a)      10.85% in 2018

b)      10.95% in 2019

c)      11.05% in 2020

Mortgage interest relief 

Mortgage Interest Relief for residential property owners which was scheduled to be abolished from the end of this year will continue until 2020.

This relates to home owners who took out qualifying mortgages between 2004 and 2012.

The relief will be reduced as follows:

a)      to 75% in 2018

b)      to 50% in 2019

c)      to 25% in 2020

Following a change in last year’s Finance Act, the amount of mortgage interest allowable against taxable rental income will increase to 85% with effect from 1^st January 2018.  However, there was no reference, in today’s Budget speech, to the expected increase from 80% to 85% mortgage interest relief on rented residential property.

As you may remember, in Budget 2017, it had been announced that100% mortgage interest relief for rental properties would be restored on a phased basis by 2020.

 Deductibility of pre-letting expenses

Expenses incurred prior to the first letting of a property are not deductible against rental income, with a few exceptions.

Following today’s Budget, property owners who rent out residential properties which have been vacant for a period of twelve months or more will be entitled to a tax deduction of up to €5,000 per property.

These expenses must be revenue in nature and not capital expenditure.

The relief will be subject to a clawback of the property is withdrawn from the rental market within a four year period.

This relief will be available for qualifying expenditure between now and the end of 2021.

Benefit-in-kind on motor vehicles

The minister announced a number of measures to incentivise the purchase of electric cars including:

a)      a 0% rate of Benefit-in-Kind for electric cars and the electricity used at to charge these vehicles while at work.

b)      a VRT Relief measure

CAPITAL ACQUISITIONS TAX

No changes were announced to the CAT tax-free thresholds in the Budget.

CAPITAL GAINS TAX

No changes were announced to CGT rates in the Budget.

Seven Year Exemption

The Minister relaxed the “Seven Year Exemption” which applied to land or buildings purchased between 7^th December and 31^st December 2014.

Disposals of qualifying assets between years four and seven will now qualify for the full Capital Gains Tax Exemption

VAT

VAT Compensation Scheme

A VAT refund scheme was introduced in order to compensate charities for input VAT incurred on expenditure.

This scheme will take effect from 1^st January 2018 but will be paid one year in arrears. In other words charities will be entitled to claim an input VAT credit in 2019 in relation to expenses incurred in 2018.

Charities will be entitled to a refund of a proportion of their VAT costs based on the level of non-public funding they receive.

The Minister also confirmed that a capped fund of €5 million will be available to fund the scheme in 2019.

For further information please visit:

http://www.budget.gov.ie/Budgets/2018/Documents/VAT_Compensation_Scheme_For_Charities.pdf

9% VAT Rate

The reduced VAT rate of 9% for goods and services, mainly related to the tourism and hospitality industry, has been retained.

VAT on Sunbed Sessions

 In line with the Irish Government’s National Cancer Strategy, the VAT rate on sunbed services will increase from 13.5% to 23% from 1^st January 2018.

BUSINESS TAXES

Corporation tax rate

The government has made a firm commitment to retaining the 12½% Corporation Tax rate to attract foreign direct investment.

 Capital Allowances for Intangible Assets

The Minister confirmed that he would be limiting the amount of capital allowances that can be claimed for intangible assets.

A tax deduction for capital allowances under Section 291A TCA 1997 on intangible assets and any associated interest cost will now be limited to 80% of the relevant income arising from the intangible asset in the accounting period from midnight of 10^th October 2017.

Key Employee Engagement Programme (KEEP)

The Minister announced plans for a new share based remuneration incentive for unquoted SME companies aimed at improving the ability of SMEs to attract and retain key staff.

This incentive will be available for qualifying KEEP share options granted between 1^st January 2018 and 31^st December 2023.

No income tax, PRSI or USC will be charged on the exercise of the share options. Instead gains from exercising these share options will only be liable to CGT @ 33%.

The tax becomes payable when the shares are sold.

State Aid approval will be required to introduce this scheme.

Accelerated capital allowances for expenditure on energy-efficient equipment

Following a review of the accelerated capital allowances scheme for energy efficient equipment, the current scheme is being extended for a further three years to the end of 2020.

STAMP DUTY

Stamp Duty on commercial property

The rate of stamp duty on commercial property transactions will have increased from 2% to 6% with effect from midnight of 10^th October 2017.

A stamp duty refund scheme is also being introduced for commercial land acquired for the development of housing, on condition that the development must begin within 30 months of the purchase of the land.

It is expected that further details of the relief and the conditions will be outlined in the Finance Bill.

FARMING AND THE AGRI-SECTOR

Stamp duty

The Stamp duty rate of 1% remains for inter-family farm transfers for a further three years.

The Stamp Duty exemption for Young Trained Farmers on agricultural land transactions will also be retained.

Leasing land for solar panels

The leasing of agricultural land for the use of solar panels will continue to be classified as agricultural land for the purposes of the CAT Agricultural Relief and the CGT Retirement Relief providing the solar panel infrastructure does not exceed 50% of the total land holding..

BREXIT

Brexit Loan Scheme 

A new Brexit Loan Scheme has been announced. A loan scheme of up to €300 million will be available at competitive rates to SMEs to assist them with their short-term working capital needs, with particular attention given to food industry businesses.

Details of this scheme will be provided by the Tánaiste and Minister for Business, Enterprise and Innovation, and the Minister for Agriculture, Food and the Marine.

Plans were also announced to hire over 40 additional staff across the Department of Business, Enterprise and Innovation and enterprise agencies in 2018 to respond to the issues arising from Brexit.

Increased funding

The Minister announced increased funding of €64 million to support the agri-sector. Of this, a further €25 million is to be provided to the Minister for Agriculture, Food and the Marine to develop further Brexit loan schemes for the agri-food sector in addition to the loan scheme discussed above.

OTHER CHANGES

Sugar Tax

 From 1^st April 2018 two rates of tax on sugar-sweetened drinks will be introduced subject to State Aid approval.

The first will apply at a rate of 30 cent per litre where the sugar content is above 8g per 100ml.

The second rate of 20 cent per litre will apply where the sugar content is between 5g and 8g per 100ml.

Drinks with less than five grams of sugar won’t attract a sugar tax.

Vacant site levy

The vacant site levy has been increased from the current 3% levy in the first year to 7% in second and subsequent years to encourage land owners to develop vacant sites rather than “hoarding” land.

The vacant site levy is due to come into effect in 2018.

An owner of a property on a vacant site register who does not develop their land in 2018 will be liable to the 3% levy in 2019 and a further 7% levy in 2020 and each year thereafter until the land is developed.

From 1^st January 2017, each local authority is obliged to maintain a register of vacant sites to include on the register, details of any site, which they believe, has been vacant for the previous twelve month period.

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, Corporation Tax, Capital Gains Tax, Revenue Compliance Interventions, Capital Acquisitions Tax, VAT.

Are you aware of how much has changed since 1st January 2017 in terms of Tax compliance, Tax Credits, Employee Subsistence Expenses, Personal/Income Tax, Corporation Tax, Capital Acquisitions Tax, Capital Gains Tax, Value Added Tax, PAYE, Stamp Duty, Transfer Pricing, Local Property Tax, Revenue Audit Procedures, etc.?

Here are a list of the Revenue eBriefs published so far this year:

1. Revenue eBrief No. 01/17  Finance Act 2016 – VAT Notes for Guidance
2. Revenue eBrief No. 02/17 Improved online services for PAYE customers
3. Revenue eBrief No. 03/17 Stamp duty levies – changes made by Finance Act 2016 and Health Insurance Amendment Act 2016
4. Revenue eBrief No. 04/17  Finance Act 2016 changes to Capital Acquisitions Tax Consolidation Act 2003 – Changes to section 86 (Dwelling House Exemption) and Schedule 2 (Group Thresholds) CATCA 2003 
5. Revenue eBrief No. 05/17  Fisher Tax Credit 
6. Revenue eBrief No. 06/17  Special Assignee Relief Programme
7. Revenue eBrief No. 07/17  Deduction for statutory registration fees paid to the Health and Social Care Professionals Council
8. Revenue eBrief No. 08/17  Revenue Opinions and Confirmations 
9. Revenue eBrief No. 09/17  Tax Relief on Retirement for Certain Income of Certain Sportspersons 
10. Revenue eBrief No. 10/17  Irish Real Estate Fund declarations
11. Revenue eBrief No. 11/17  Average Market Mid-Closing Exchange Rates v Euro – Lloyds Conversion Rate
12. Revenue eBrief No. 12/17  Revenue Arrangements for Implementing EU and OECD Exchange of Information Requirements In Respect of Tax Rulings
13. Revenue eBrief No. 13/17  PAYE – Exclusion Orders
14. Revenue eBrief No. 14/17 –  Taxation of Paternity Benefit
15. Revenue eBrief No. 15/17  Deduction for income earned in certain foreign states (Foreign Earnings Deduction) 
16. Revenue eBrief No. 16/17  Revenue Technical Service – Solicitor Access to the MyEnquiries online contact facility 
17. Revenue eBrief No. 17/17  R and D tax credit claims in respect of projects supported by Enterprise Ireland R and D grants
18. Revenue eBrief No. 18/17  Updates to the Electronic Relevant Contracts Tax (eRCT) System – Look up Payment Notifications
19. Revenue eBrief No. 19/17  Revenue seeks applications for independent Research & Development (R&D) experts
20. Revenue eBrief No. 20/17  Solvency II – EU (Insurance and Reinsurance) Regulations 2015 
21. Revenue eBrief No. 21/17  Opticians in employment 
22. Revenue eBrief No. 22/17  Securitisation: Notification of “Qualifying Company” Section 110 Taxes Consolidation Act, 1997.
23. Revenue eBrief No. 23/17  Code of Practice for Revenue Audit and other Compliance Interventions
24. Revenue eBrief No. 24/17  Health Expenses / Assistance Dogs
25. Revenue eBrief No. 25/17  Non Principal Private Residence (NPPR) Charge
26. Revenue eBrief No. 26/17  Irish Real Estate Fund declarations
27. Revenue eBrief No. 27/17  Certification of Residence for Individuals/Companies/Funds
28. Revenue eBrief No. 28/17  CGT implications for individuals of takeover of Fyffes plc by Sumitomo Corporation
29. Revenue eBrief No. 29/17  PAYE Modernisation – Report on Public Consultation Process
30. Revenue eBrief No. 30/17  Non Principal Private Residence charge notification facility
31. Revenue eBrief No. 31/17  Home Renovation Incentive (HRI)
32. Revenue eBrief No. 32/17  Help To Buy Scheme
33. Revenue eBrief No. 33/17  Section 900 Taxes Consolidation Act 1997 – Power to call for the production of books, information etc.
34. Revenue eBrief No. 34/17  Charitable Donations Scheme
35. Revenue eBrief No. 35/17  Revenue Technical Service (RTS) for Agents and Taxpayers
36. Revenue eBrief No. 36/17  Large Cases Division: Opinions/Confirmation on Tax/Duty Consequences of a Proposed Course of Action
37. Revenue eBrief No. 37/17  VAT treatment of education and vocational training
38. Revenue eBrief No. 38/17  ROS – Extension of Pay & File Deadline for ROS Customers for 2017
39. Revenue eBrief No. 39/17  Corporation Tax (CT1) Returns for 2016 and 2017, Forms 46G (Company)
40. Revenue eBrief No. 40/17  Offshore funds regime
41. Revenue eBrief No. 41/17 Incapacitated Child Tax Credit
42. Revenue eBrief No. 42/17  MyEnquiries enhancements
43. Revenue eBrief No. 43/17  Exemption in respect of certain expense payments for resident relevant directors
44. Revenue eBrief No. 44/17  Definition of ‘chargeable person’ – Self Assessment
45. Revenue eBrief No. 45/17  Employees’ Subsistence Expenses and Motoring and Bicycle Expenses
46. Revenue eBrief No. 46/17  Underpayment of Preliminary Corporation Tax: waiver of interest where the underpayment arises solely due to movements in the exchange rate of the functional currency
47. Revenue eBrief No. 47/2017  Pre self-assessment – stamp duty manual
48. Revenue eBrief No. 48/17  Taxation of exam setters, exam correctors, invigilators, etc.
49. Revenue eBrief No. 49/17  Tax treatment of the reimbursement of Expenses and Travel and Subsistence to Office Holders and Employees
50. Revenue eBrief No. 50/17  Returns Compliance Income Tax and Corporation Tax
51. Revenue eBrief No. 51/17  Local property tax appeals
52. Revenue eBrief No. 52/17  Company reconstructions without change of ownership (Section 400 TCA 1997)
53. Revenue eBrief No. 53/17  Restructured VAT Tax and Duty Manual
54. Revenue eBrief No. 54/17  Full self-assessment: Time limits for making enquiries and making or amending assessments
55. Revenue eBrief No. 55/17  Surcharge on certain undistributed income of close companies
56. Revenue eBrief No. 56/17  Charges on income for Corporation Tax purposes
57. Revenue eBrief No. 57/17 Time limits for raising assessments and making enquiries – section 955 TCA 1997
58. Revenue eBrief No. 58/17  Filing and paying Stamp Duty on Instruments
59. Revenue eBrief No. 59/17  Capital Acquisitions Tax – Business Relief
60. Revenue eBrief No. 60/17  Pensions Manual Amended
61. Revenue eBrief No. 61/17  PAYE Taxpayers and Self-Assessment – Interaction of PAYE and Self-Assessment Procedures: Income Tax
62. Revenue eBrief No. 62/17  Company Incorporation – Economic Activity
63. Revenue eBrief No. 63/17  Tax-Geared Penalties for Non-Submission of Returns
64. Revenue eBrief No. 64/17  Tax treatment of certain dividends
65. Revenue eBrief No. 65/17  Full self-assessment – Revenue assessment in the absence of a return
66. Revenue eBrief No. 66/17  New PAYE Services and ROS registration changes
67. Revenue eBrief No. 67/17  Data Retention Policy for Compliance Interventions
68. Revenue eBrief No. 68/17  Provisions Relating to Residence of Individuals
69. Revenue eBrief No. 69/17  Guidelines on tax consequences of receivership and mortgagee in possession (MIP)
70. Revenue eBrief No. 70/17  Irish Real Estate Funds
71. Revenue eBrief No. 71/17  ROS Form 11 – 2016 income tax return
72. Revenue eBrief No. 72/17  Guide to Exchange of Information under Council Directive 2011/16/EU, Ireland’s Double Taxation Agreements and Tax Information Exchange Agreements and the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters.
73. eBrief No. 73/17  Guidelines for requesting Mutual Agreement Procedure (MAP) assistance in Ireland
74. Revenue eBrief No. 74/17  Transfer Pricing Documentation Obligations
75. Revenue eBrief No. 75/17  Tax Treatment of Members of the European Parliament
76. Revenue eBrief No. 76/17  ROS – Digital Certificate Renewal reminder notices
77. Revenue eBrief No. 77/17  Corporation Tax Statement of Particulars – Section 882 TCA 1997
78. Revenue eBrief No. 78/17  Accessing Schedule E information – 2016 Income Tax Return

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 Advice for Revenue Audits, Compliance Interventions, Reviews, Investigations under all Tax Heads

Today, 20^th November 2015, the Revenue Commissioners published eBrief 112/15, the updated and new version of the Code of Practice for Revenue Audit and other Compliance Interventions.  It covers types of intervention, audit procedures, tax and duty defaults, tax avoidance, prosecution, etc.

The main changes include the following:

• Paragraph 1.10.5 states that a Revenue officer may, under Section 851A TCA 1997, disclose taxpayer information to a professional body to report a tax agent/practitioner in situations where the Revenue officer is satisfied that the work carried out by the agent/practitioner does not comply with the professional standards of that representative body.

• Paragraph 3.16 details the term “full cooperation.” There is a list of what constitutes “full cooperation” as well as what is deemed to be a lack or failure to cooperate fully with Revenue.  This revised Audit Code focuses on the importance of “full cooperation” in this paragraph as well as in the tables of penalties.

• New chapter 8 outlines tax law, Revenue policy and procedures for regularising tax and duty liabilities that arise due to certain types of tax avoidance. Paragraph 8.6 deals with the concept of a Qualifying Avoidance Disclosure.  This is separate and distinct from the information on disclosure as outlined in Chapter 3.

• Paragraph 5.4.1 of the Code has been revised to reflect the amendment in Finance Act 2014 in relation to the Surcharge for Late Submission of Returns (Income Tax, Corporation Tax and Capital Gains Tax). It states “Section 1084 also provides that the filing, on time, of an incorrect return, either carelessly or deliberately, is deemed to be late filing.”

• Inclusion of Legislation for Tax Avoidance Surcharge in Appendix III. It states that under Section 811D TCA 1997 “Where a ‘tax avoidance surcharge’ is not agreed or an agreed ‘tax avoidance surcharge’ is not paid, a relevant court will make a determination regarding liability to a ‘tax avoidance surcharge’. While the surcharge applied by Section 811D TCA 1997 is not a penalty it is collected as a penalty.”

• In cases where compliance intervention notices have been given but have not been settled before the 20th November 2015, the taxpayer has the option of choosing whether the settlement be made under the terms of the 2015 Code of Practice for Revenue Audit and other Compliance Interventions or the Code of Practice for Revenue Audit and other Compliance Interventions of 14th August 2014.

For further information, please click:https://www.revenue.ie/en/tax-professionals/documents/code-of-practice-revenue-audit-2015.pdf

What can we do for you?

Revenue Compliance Interventions, Audits and Investigations arise mainly due to inaccuracies and inconsistencies in taxpayers’ submissions.  An automated process can also randomly select individuals and businesses in a small number of cases.  They can be costly and may result in publication on the Revenue’s Tax Defaulters list or even prosecution.  We offer a pre-audit review or compliance check as well as full and comprehensive support throughout the entire Audit process.  Our aim is to assist in minimizing the consequences of any tax underpayments and to achieve the best possible outcome.

For further information, 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.

The European Court of Justice held that the supply of services by a non-EU Head Office to a branch situated in the E.U. is now liable to VAT where that branch is part of a VAT group.

VAT grouping allows EU member states to treat two or more companies as a single entity for VAT purposes which means transactions between members of a VAT group are normally ignored for VAT purposes.

However, the ruling on this dispute between Skandia America Corporation and the Swedish Tax Authorities means that services previously deemed to be VAT exempt will now be subject to VAT rates of between 15% and 27%.

This decision is of particular relevance to the financial services industry since the products and services they sell (e.g. mortgages and insurance) are largely exempt from VAT.  The ruling means they will now be unable to recover input VAT refunds within the EU resulting in additional costs for banks and/or insurers who have outsourced IT and other services.

The Background: 

• The non-EU head office purchased IT services from a third party and made those services available to its branch which was situated in an EU member state i.e. Sweden.

• The US head office charged the cost of those services to its Swedish branch with a 5% mark up.

• The Swedish branch then provided those IT services to users both within and outside the VAT group.

• The costs charged by the US Head Office to the Swedish Fixed Establishment were disregarded for VAT purposes.

• The Swedish Tax Authorities didn’t hold this view.  Instead they believed the supplies between the US head office and the Swedish branch were liable to Swedish VAT.

• The Swedish Tax Authorities registered the US Head Office as a non established taxable person and raised an assessment for output tax on the supply of services to its Swedish branch.

• Skandia America Corporation appealed this assessment.

• The Swedish Tax Authorities defended its position stating that the branch was part of a VAT group and therefore a separate taxable person for VAT purposes.

• Skandia America Corporation relied on the FCE Bank Principles Case stating that a head office and its branch are part of the same legal entity and therefore no VAT can be due on the recharge.

• The Advocate General concluded that a branch could not be considered a VAT Group member independent of its head office because a branch is not deemed to be a taxable person distinct from the head office.

• On 17^th September 2014, however, the ECJ held that VAT must be charged on services provided by companies by their overseas offices.

The Consequences: 

The consequences of this ruling will be substantially higher tax bills for financial services companies especially in the U.K. which is considered the “Global Financial Services Centre.”

Revenue Tax Audits, Compliance Interventions and Investigations. Code of Practice for Revenue Audit

The Irish Revenue Commissioners introduced a revised Code of Practice for Revenue audits and other compliance interventions, effective from 14^th August 2014.  This updated document replaces the 2010 Code of Practice.  Where a tax compliance intervention notice has issued but a settlement was not been reached before 14th August 2014, you, the taxpayer, have the option to choose whether the settlement is made under the terms of (i) the 2014 Code of Practice for Revenue Audit & other Compliance Interventions or (ii) the 2010 Code of Practice for Revenue Audit.

The following are some of the key changes introduced in Revenue’s new Code of Practice for Revenue Audit and other Compliance Interventions:

• Revenue will now generally focus on a single year or single period where specific risk has been identified. Previously compliance interventions were carried out over multiple years or periods, especially in relation to the National Contractors Project.  Under the new code of practice, the scope of the audit or intervention will be extended in circumstances where material risks have been identified, using a range of data sources covering a number of years or tax periods.

• The Code will apply to more taxes including Local Property Tax.

• Paragraph 3.5 acknowledges that there may be exceptional circumstances where a “no loss of revenue” claim may be considered in relation to non-VAT and RCT cases. The onus of proof, however, rests with the Taxpayer and/or the Tax Agent.

• Paragraph 5 deals with the Surcharge for the late submission of Tax Returns. Clarification has been provided in paragraph 5.4.1 in relation to Income Tax, Corporation Tax, Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax stating “…a late filing surcharge will not be sought where the return was filed on or before the specified return date and a tax-geared penalty was applied to a settlement.”

• Paragraphs 19.1 and 19.1. outline new protocols for e-audits. These include notification procedures, the format of pre-audit meetings for the purposes of reviewing electronic records as well as the data security policy.

• Paragraph 5.8 provides clarification that where there is no clear cause for the delay in finalising the audit or compliance intervention, Revenue cannot delay or withhold taxpayer’s entitlement to credits or refunds of tax.

For further information, please click: https://www.revenue.ie/en/tax-professionals/documents/code-of-practice-revenue-audit-2014.pdf

What we can do for you

We have a wealth of experience in successfully dealing with Revenue audits, compliance interventions and investigations.  We can assist you to effectively prepare for the intervention, interact/liaise with Revenue and discuss/negotiate settlements, on your behalf.

Our professional services include carrying out detailed VAT and Employer/Payroll Tax Reviews to identify areas of non-compliance, exposure, risk, potential improvements and cost savings, etc.

For further details as to how we can help, 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.