Help with Tax Returns

 

 

Today, 28^th May 2026, the Revenue Commissioners issued a press release.  In it, important changes were announced in relation to Customs Rules for the importation of goods, valued at €150 or less, from outside the European Union.  This includes Great Britain.  This change will take effect in every EU member state from 1^st July 2026.   

 

 

What does this mean?

From 1^st July 2026, the EU will introduce changes to the customs clearance of low‑value e‑commerce packages arriving from countries outside the EU, effectively making them more expensive.  A €3 customs duty will apply to each item within a package.  This will not just increase the cost of online purchases but it will also impact the process for returning goods.

 

 

What are the current rules?

Currently, a customs duty relief threshold is in place.  This means that no customs duty is applicable on eCommerce packages entering the EU on goods, excluding delivery charges, with an intrinsic value not exceeding €150.  However, from 1^st July 2026, that will change.

 

 

Where will the €3 customs duty be applied?

It will be applied at the checkout or upon delivery.

 

 

Anything else to consider?

• The new €3 customs duty per item will apply, plus VAT.

 

• The VAT rate payable on the goods is the VAT rate that would be applicable if those same goods were purchased in Ireland.

 

• In general, the €3 duty is non-refundable.

 

• Couriers and An Post will require that Irish consumers pay the €3 duty per item before the goods can be delivered.

 

• Before you make an online purchase, you should check exactly where the business is based. While no Customs duty applies if the goods are based in Ireland or any other EU member state at such time as those goods are ordered, it’s very important to know exactly where the business is located before you buy. Goods may be shipped from outside the European Union, even where a website appears to show the business as Irish or EU‑  According to Revenue:

“For businesses who do not show Customs Duty on its website, it is vital to check the website’s “Terms and Conditions” and, or “About Us” page to confirm its physical business address and the location from where the goods will be shipped.”

 

 

 

For further information, please click:

https://www.revenue.ie/en/customs/individuals/relief-low-value-consignments/index.aspx

https://www.revenue.ie/en/corporate/press-office/press-releases/2026/pr-052826-customs-rules.aspx

 

 

 

For all your tax questions including help preparing and filing your Tax Returns, 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.

 

 

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.

 

 

 

 

A number of Revenue Guidance Documents have been introduced.  This follows Finance Act 2014 being signed into law on 23^rd December 2014.  This article will be focusing on the following documents, with specific focus on Capital Gains Tax, Corporation Tax, Relevant Contracts Tax and CAT:

 

1. Transfer of a Business to a Company (Section 600 Taxes Consolidation Act 1997 Relief and Assumption of Business Debt) – eBrief no. 111/14 (24^th December 2014)

 

2. Deduction for Income Earned in Certain Foreign States (Foreign Earnings Deduction) – eBrief no. 106/14 (24^th December 2014)

 

3. Guidance on Compensation Payments under Section 2B of Employment Permits Act 2003 – eBrief no. 112/14 (24^th December 2014)

 

4. Guide to the Capital Acquisitions Tax Treatment of receipts by children from their parents for their support, maintenance or education – eBrief no. 109/14 (24^th December 2014).

 

5. Relevant Contracts Tax – Revised Penalties from 1^st January 2015 for the failure of a Principal Contractor to operate R.C.T. correctly on relevant payments to a contractor – eBrief no. 110/14 (24^th December 2014)

 

6. Capital Gains Tax – Finance Act 2014 – Vodafone Shareholders – eBrief no. 107/14 (24^th December 2014).

 

 

 

Transfer of a Business to a Company

 

Section 600 TCA 1997 provides that Capital Gains Tax on the transfer of a business and all its assets to a company may be deferred providing four conditions are met:

1. The owner must transfer the business as a going concern
2. The transfer is for bona fide commercial reasons and not for the purposes of tax avoidance
3. All the assets of the business, excluding cash, are transferred and
4. The consideration consists wholly or partly of shares in the company.

 

 

Any liabilities taken over are to be treated as cash consideration but in practice, Revenue may not enforce this rule in circumstances where:

1. The transfer is in exchange for shares only and
2. The liabilities are genuine trade creditors i.e. in cases where the business assets exceed its liabilities and the only other consideration is the assumption by the company of liability for bona fide trade creditors.

 

 

Revenue has clarified in this eBrief that bona fide trade creditors will not be treated as other consideration for the transfer.  By this, they mean genuine trade creditors who provide goods and/or services to the business.

 

 

The Revenue Concession does not apply to business debts such as bank loans or tax liabilities.

 

 

 

 

 

Deduction for Income Earned in Certain Foreign States

 

Finance Act 2012 introduced the Foreign Earnings Deduction (F.E.D.).

 

 

It was designed to encourage and incentivise individuals who perform their duties of employment in the specific countries Ireland was targeting for the purposes of business development and export growth.

 

 

In 2012 this tax relief applied to Irish resident employees who carried out significant duties in Brazil, Russia, Indian, China and South Africa.

 

 

From 2013 to 2014 the list of countries was extended to Egypt, Algeria, Senegal, Tanzania, Kenya, Nigeria, Ghana and the Democratic Republic of Congo.

 

 

According to this eBrief the number of relevant states now include: Japan, Singapore, South Korea, Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Indonesia, Vietnam, Thailand, Chile, Oman, Kuwait, Mexico and Malaysia.

 

 

 

What were the rules prior to Finance Act 2024?

 

Prior to Finance Act 2014 the rules for claiming the relief were as follows:

 

1. The individual must exercise the duties of his/her employment for at least sixty days in the above mentioned countries i.e. those listed from 2012 to 2014.

 

2. Each visit must consist of four days to be considered for F.E.D. Relief.

 

3. The formula to determine the deduction was as follows:

 

 

Employment Income   x  Qualifying Days

Total Days

 

 

4. Previous legislation capped the deduction at €35,000.

 

5. “Qualifying Days” related to days carrying out the duties of employment and did not include days travelling.

 

 

 

What changes did Finance Act 2014 introduce?

 

Finance Act 2014 introduced the following changes for the years 2015, 2016 and 2017:

 

1. The required number of qualifying days abroad dropped from sixty to forty days.
2. Legislation reduced the length of time spent working abroad from four days to three days.
3. The time spent travelling from Ireland to a relevant state or from a relevant state to Ireland or to another relevant state is deemed to be a “Qualifying Day.”

 

 

 

What is meant by “qualifying days”?

 

A day, the whole of which is spent in a relevant state for the purposes of carrying out the duties of an office or employment.

 

 

 

 

Other Points to Consider

 

1. Employment Income includes stock options but excludes pension contributions, tax deductible expense payments, benefits-in-kind, termination payments, etc.

 

2. There is no tax relief from PRSI.

 

3. No tax relief from Universal Social Charge is available.

 

4. Relief does not apply to those working in the civil and public services.

 

5. The Relief is not available in respect of income from an office or employment which is chargeable on the remittance basis.

 

6. The Relief is not available in respect of income which qualifies for:

 

•  Section 472D – Research and Development Credit

 

• Section 825C – Special Assignee Relief Programme

 

• Section 822 – Split Year Residence Relief

 

• Section 825A – Relief for Income Earned outside the State.

 

 

 

 

Guidance on Compensation Payments under Section 2B of Employment Permits Act 2003

 

The best starting point in relation to understanding the tax treatment of awards/settlements is Section 192(A) Taxes Consolidation Act 1997:

• If the award/settlement relates to a loss of wages/salary such as a Payment of Wages Claim or an Unfair Dismissal Claim then it is liable to tax.  In other words, if the award/claim relates to financial loss then it’s taxable.

 

• An award/settlement which relates to compensation for a breach of the employee’s statutory entitlements (i.e. which are not deemed to be remuneration or arrears of wages) is not taxable.  In other words, it’s exempt from tax if it relates to an infringement of the employee’s rights.

 

Now that we’ve established that the main distinction between a taxable award/settlement and a tax exempt award/settlement is the distinction between wages/salary and compensation, let’s look at Section 2B of the Employment Permits Act 2003.  This piece of legislation was introduced to prevent or at least deter employers from employing foreign nationals without a valid employment permit.

 

 

 

How does it work?

It allows the foreign national to take a civil action against his/her employer for compensation in relation to work done or services carried out even if there is no legal contract in place.

As the compensation is not deemed to be for an infringement of a right, rather, it’s considered to be the reimbursement of a salary or wages then it is liable to tax.

The compensation is calculated by a court order based on a national minimum hourly rate of pay (or any rate of payment which is fixed under, or pursuant to, any enactment).

 

 

What is the tax treatment?

The tax treatment of these compensation payments is covered by two new provisions:

1. Section 124A Taxes Consolidation Act 1997 and
2. Section 5A of Section 192(A) TCA 1997

which were introduced by Section 37 of the Employment Permits (Amendment) Act 2014.

 

If compensation payments are made to individuals under Section 2B of the Employment Permits Act 2003 they are liable in full to PAYE and the Universal Social Charge.

 

They will not be liable to PRSI as they are not treated as “reckonable emoluments” as defined in the Social Welfare & Pensions Act 2012.

 

 

 

 

Guide to the Capital Acquisitions Tax Treatment of receipts by children from their parents for their support, maintenance or education

 

Capital Acquisitions Tax is the tax levied on gifts and inheritances received by individuals where the value of the gift/inheritance exceeds that individual’s lifetime tax free threshold amount.

 

Section 82(2) of the Capital Acquisitions Tax Consolidation Act exempts from tax “normal and reasonable” payments (in money or monies worth) made by the disponer during his/her lifetime for the support, maintenance or education of their:

• Children or
• Civil Partner’s children or
• A person to whom the individual stands in loco parentis or
• A dependent relative of the disponer

 

 

While carrying out compliance programmes, the Revenue Commissioners identified ways in which this exemption was being abused.  As a result, Section 81 Finance Act 2014 amended Section 82 Taxes Consolidation Act 1997 to ensure that where there is a need to provide for the support, maintenance and education of children the exemption is confined to the following:

 

• A minor child of the disponer or of the civil partner of the disponer or

 

• A child of the disponer or of the civil partner of the disponer who is under twenty five years of age and is in full time education or

 

• A child, regardless of age, who is permanently incapacitate by reason of physical or mental infirmity from maintaining themselves.

 

 

 

So what do we mean by “normal and reasonable” payments?

 

Revenue’s view is that “normal” refers to the nature of the payment or expenditure.  Examples include the payment of fees and accommodation costs for a dependant child attending college.

“Reasonable” refers to the financial circumstances of the disponer.  Even though there is no ceiling on the value of what can be provided by way of maintenance or support, the exemption will not apply if the disponer makes payments which are disproportionate to his/her means.

 

 

 

Back to the eBrief:

 Section 82(2) does not cover all payments by a parent to a child.  Revenue does not accept that gifts to a child who is financially independent are exempt from Capital Acquisitions Tax nor does it accept that gifts of a capital nature are tax exempt.

 

Examples of non-exempt benefits/gifts/payments are as follows:

 

1. House purchase

 

2. Free use of a house

 

3. The deposit on a house in excess of €3,000

 

4. money if in excess of €3,000 per annum

 

 

 

 

 Summary

 

So what benefits/gifts/payments are tax exempt?

 

1. The non exclusive occupation of the family home by a child who is a family member.

 

2. Free use of a house by a child attending university who is not more than twenty five years old.  This is provided the support and maintenance falls within the “normal and reasonable” provision.

 

3. The cost of family functions paid by a parent.  For example, a wedding paid by a parent.

 

4. Payments to cover the child’s normal costs associated with attending college.  This includes rent, food, clothing, educational material, tuition fees, transport costs, pocket money, etc.  Please keep in mind that the child must be under the age of twenty five years.

 

 

 

 

Relevant Contracts Tax

Before we examine this guidance document, I will briefly explain the Relevant Contracts Tax system in Ireland.

 

 

 

 What is Relevant Contracts Tax (R.C.T.)?

R.C.T. is a tax that applies to the following industries in Ireland:

1. Construction

 

2. Forestry

 

3. Meat Processing

 

 

R.C.T. applies to payments made by a Principal Contractor to a Subcontractor under a Relevant Contract i.e. a contract for a Subcontractor to carry out relevant operations for the Principal Contractor.

 

 

 

 

Important Points to Note:

 

1. An employment relationship does NOT exist i.e. the Subcontractor is NOT an employee of the Principal Contractor.

 

2. The Subcontractor provides his/her own labour or the labour of other individuals when carrying out the relevant operations for the Principal Contractor.

 

 

 

So, how does this tax work?

Before 31^st December 2011, the Principal Contractor was required to deduct withholding tax from the gross payments made to a Subcontractor under a relevant contract and submit this tax to the Irish Revenue Commissioners on the Subcontractor’s behalf.  At the time there was only one rate and that was 35%.

 

The Principal provided the Subcontractor with a Certificate outlining the tax paid on his/her behalf (Form RCTDC 45) and the Subcontractor could then receive a credit or in some cases a refund of this tax withheld once they filed an annual Income Tax Return.

 

Then, the Principal was required to file a monthly Return of tax deducted (RCT 30) and pay the relevant RCT deducted to Revenue. The Principal Contractor was also obliged to file an Annual Return of Gross Payments and Tax Withheld on an RCT 35 which had to be filed by 23^rd February following the year end.

 

If, however, the Subcontractor had a Certificate of Authorisation or a C2, the Principal could pay the Subcontractor without deducting R.C.T.

 

 

 

What changes were introduced?

On 1^st January 2012 the rules changed with the introduction of three rates of withholding tax:

1. Zero rate for Subcontractors who previously held a C2
2. 20% for Subcontractors who were registered for tax and had a record of substantial tax compliance
3. 35% for Subcontractors in all other situations.

 

 

 

Back to eBrief 110/14

Section 17 Finance Act 2014 introduced a revised sanction for situations where the Principal Contractor fails to operate RCT on relevant payments to Subcontractors.  The level of penalty will depend on the percentage of tax withheld from the Subcontractor’s payments.

 

From 1^st January 2015 the Principal will be liable for the following penalties in the event of non operation of R.C.T.

• If the Subcontractor is registered with Revenue and usually liable to a deduction of zero percent, the Principal will be liable to a civil penalty of 3% of the relevant payment.

 

• If the Subcontractor is registered with Revenue and is tax compliant and therefore liable to a RCT deduction rate of 20%, then the Principal will be liable to a civil penalty of 10% of the relevant payment.

 

• Where the Subcontractor is registered with Revenue but is not tax compliant and, as a result, all payments are liable to an RCT deduction rate of 35%, the Principal will be liable to a civil penalty of 20% of the relevant payment.

 

• Where the Subcontractor is not registered with Revenue i.e. the individual to whom the payment was made is not known to Revenue, then the Principal will be liable to a civil penalty of 35% of the relevant penalty.

 

 

 

What about filing obligations?

In all the above four situations the Principal Contractor will be required to submit an Unreported Payment Notification to Revenue.

 

 

 

 

Capital Gains Tax – Finance Act 2014 – Vodafone Shareholders

On 14^th May 2014 the Irish Revenue Authorities issued a detailed Tax Briefing outlining the tax treatment of the Vodafone Return of Value to its Shareholders.  I wrote an Explanatory Blog, which was published on this site on 16^lth May 2014, outlining the comprehensive guidance on the calculation of the base cost for Capital Gains Tax purposes.  In my Blog, I discussed the Income Tax Treatment for shareholders who opted for “C Shares”:

 

“individuals who opted for the ‘C Shares’ received a dividend from Vodafone which consisted of (a) a cash amount and (b) shares in Verizon.

 

The individual was then required to include both amounts in his/her annual Income Tax Return i.e. (a) the cash actually received and (b) the market value of the Verizon Consideration Share Entitlement received.

 

Income Tax, P.R.S.I. and the Universal Social Charge were then levied on this dividend.”

 

 

On 23^rd December 2014 Revenue issued additional guidance on the tax treatment where Returns of Value of €1,000 or less were received by Vodafone shareholders.  eBrief 107/14 contains details of a tax relieving measure which was introduced by Section 48 Finance Act 2014.

 

 

 

What is this Tax Relieving Provision?

Section 48 Finance Act 2014 allows individuals who received a “Return of Value” payment of €1,000 or less under the terms of the Return of Value to be treated as having received a Capital Sum which, if the individual had acquired the Vodafone shares as a result of originally investing in Eircom back in 1999, would result in a NIL Capital Gains Tax liability.

 

The individuals can opt to have the payment treated as income should they wish. In this case the payment sum would be liable to Income Tax, PRSI and the Universal Social Charge.

 

 

 

What are the filing requirements?

In situations where Vodafone shareholders made a capital loss on the “Return of Value” of €1,000 or less and providing these individuals had no other chargeable gains arising in the 2014 tax year, then there is NO requirement to file a Tax Return in relation to the Vodafone “Return of Value” unless of course, these individuals are otherwise required to do so under a different section of the Taxes Consolidation Acts 1997.

 

 

 

 

Why is this provision so beneficial to Taxpayers?

The loss arising on the “Return of Value” can be carried forward. It can be written off against gains that may arise in the future.  This may result in a reduced Capital Gains Tax liability in that tax year.

 

 

 

Any other points to consider?

If a taxpayer prefers to have his / her “Return of Value” of €1,000 or less treated as Income, this information must be included in his / her annual Income Tax Return as outlined in Revenue’s Tax Briefing dated 14^th May 2014.

 

 

 

 

For further information, please click: Finance Act 2014

 

 

 

 

At Accounts Advice Centre, we can provide you with a full range of accountancy and tax services.  To make an appointment, please email 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.