Brass tax - June 2019

Jun 03, 2019
It seems to be the season of public consultations on tax matters in the Department of Finance, with four launched in the month of May alone. This brings the total to 14 in the past two and a half years. While some areas under the current review such as transfer pricing and the R&D credit haven’t been scrutinised by way of consultation in recent years, others have been examined and re-examined and then examined again.

One such example is the Employment and Investment Incentive (EII) scheme, which was introduced in Ireland in 2011. The relief, which offers a tax break of up to 40% in investments in certain corporate trades was explored in 2014, 2015 and 2018 – and now again in 2019. Over the years, many professional bodies, including this Institute, have consistently made the same points in its responses, seeking solutions to problems in schemes such as the EII – many of which have yet to be solved.

In considering the most recent wave of consultations, it is apparent that in order to secure proper engagement with the consultative process, respondents need tangible evidence that their comments and suggestions are being listened to and acted upon. Departments cannot continue to seek and re-seek answers to the same questions without acting on some of the solutions proposed by respondents.

Acknowledging that there have been some minor amendments to the EII scheme as a result of the last three reviews, these changes haven’t addressed some of the main concerns with the scheme. These include the restrictions that block access to the relief for many potential investors and the penalties if self-certification when claiming the relief is incorrect.

Tax consultations in Ireland might help identify problems with the various reliefs, but there is little tangible evidence of any of the problems being solved – or, in some cases, even addressed – in response. One improvement to the process could be the introduction of a code of consultation principles, similar to the one that operates in the UK, which provides undertakings on time limits, responses and actions. Otherwise, what’s the point of having a public consultation?
Cróna Clohisey ACA is Manager, Tax & Public Policy, at Chartered Accountants Ireland.