David Moran, Tax Associate Director with Grant Thornton is joined by Jim Kelly, Tax Director, with Grant Thornton Ireland.

David discusses the latest developments in the world of tax. Jim shares his insights on the new Code of Practice for Revenue Compliance Interventions and what tax payers should consider in advance of its implementation on the 1st of May 2022.

Pay and File Extension

Revenue released an eBrief on the 12th of April announcing an extension to the ROS return filing and payment date for Income Tax and Capital Acquisitions Tax filings for 2021.

For taxpayers who file their 2021 Income Tax return (Form 11) and make the respective payment through ROS for their 2022 Preliminary Tax obligations and their 2021 Income tax obligations, the due date is extended to Wednesday, the 16th of November 2022.

For beneficiaries who received gifts or inheritances with valuation dates in the year ended the 31st of August 2022 and who make a CAT return and the appropriate payment is made through ROS, the due date is also extended to Wednesday, the 16th of November 2022.

To qualify for the extension, customers must both pay and file through ROS. Where only one of these actions is completed through ROS, the extension does not apply and the required date to submit both returns and payments is no later than the 31st of October 2022.

Public Consultation on the Research & Development Tax Credit and the Knowledge Development Box

The Department of Finance published a public consultation on the Research and Development Tax credit and Knowledge Development Box on the 14th of April 2022.

The purpose of this public consultation is to consider the current challenges facing firms who are active in the R&D space, as well as the implications of recent domestic and international tax reforms for these two reliefs.

The Department of Finance have noted that:

“In responding to this consultation you are invited to:

  • Give your views on the specific questions set out below. You do not have to answer every question – you can choose to answer any or all of the questions.
  • Provide details of any alternative approaches or options you feel might be beneficial in dealing with the issues being addressed.
  • Provide details of relevant issues not covered in this paper.
  • Where appropriate, provide some analysis of the Exchequer cost/yield of your preferred option.
  • Comment generally on the direction you would like to see tax policy in this area develop.”

The consultation period will run from Thursday the 14th of April to Monday, the 30th of May 2022.

VAT reduction on gas and electricity

Minister for Finance, Paschal Donohoe TD announced that there will be a reduction in the VAT rate from 13.5% to 9% on energy bills. This reduction is due to take effect from the 1st of May 2022 and is due to remain in place until the end of October 2022.

It was noted that this reduction would result in an estimated cost of approximately €46 million to the exchequer.

It was also announced that the additional once-off fuel allowance payment of €100 was agreed and signed off by the government.

This announcement comes after a temporary reduction in the excise duty applied to petrol, diesel and marked gas oil was introduced on Wednesday, the 9th of March.

Revenue press release on the Debt Warehousing regime

On the 31st of March 2022, Revenue wrote to the Minister of Finance, Paschal Donohoe TD providing an update on the Debt Warehousing regime. The statistics published by Revenue show that at the end of January 2022, almost 105,000 businesses were availing of the scheme with over €3 billion in tax debt warehoused. It was further noted that the total debt eligible for the scheme since its introduction was €30.9 billion; however 90% of the debt has been paid.

Revenue also confirmed that it would be contacting all businesses availing of the Debt warehousing regime confirming that the debt remained free until the end of period 2 (i.e. 31st of December 2022 or 30th of April 2023 in certain cases) and that in order to remain in the regime businesses must remain up to date on all of their tax filings.

Revenue have given businesses until the end of April 2022 to bring all of their tax filings up to date. If these filings are not completed by the end of April, the interest free period and reduced interest rate of 3% will no longer apply to their warehoused tax debt.

The Collector-General, Mr Joe Howley also noted that members of his team would be in contact with businesses availing of the Debt Warehousing regime to put in place a tailored payment arrangement over an agreed timeframe, which would take account of the financial circumstances of the business.

Revenue have published sample copies of these letters being issued to businesses availing of the Debt Warehousing regime on their website.

Update on Pillar II: Global minimum tax rate

As noted on our previous podcasts, the EU is currently moving forward with a new directive implementing the new OECD global minimum tax rate of 15% for large multinational groups with turnover in excess of €750 million.

In recent weeks, Poland has vetoed an agreement among EU Finance Ministers seeking to implement this new directive. EU procedural rules mandate unanimous member agreement for rule implementation, meaning Poland’s objection delays Pillar 2 implementation in the EU.

Polish Secretary of State Magdalena Rzeczkowska provided that her objection largely hinges on her desire for Pillar 2 to have an explicit legal link to the other main piece of the OECD/G20’s Inclusive Framework, being Pillar 1.

Updated Tax and Duty Manual – Payments on terminations of an office or employment or removal from an office or employment

On the 5th of April, Revenue updated their tax and duty manual with respect to payments on terminations of an office or employment or removal from an office or employment. Paragraph 4.2 of the manual has been updated to reflect the conditions pertaining to the increase of €10,000 on the Basic Exemption.

Changes to Revenue Compliance Interventions

Jim Kelly,  Director with Grant Thornton Ireland, discusses the new changes to Revenue’s Code of Practice for Compliance Interventions, which will come into effect from the 1st of May 2022, including:

  • The main changes to the Code of Practice and how this will effect Revenue Interventions going forward;
  • The removal of Aspect Queries and Assurance Checks and the creation of Risk Reviews and what this entails for tax payers;
  • Revenue’s focus on real time reviews and engagement;
  • Insights as to what areas tax payers should be cognisant of and that generally draw attention from Revenue;
  • Tips on how businesses and tax payers can prepare for these new changes and much more.

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Jim Kelly
Jim Kelly
Director – Tax
Dublin, City Quay
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