The Governing Council of the European Central Bank (ECB) today decided to introduce a two-tier system for reserve remuneration, which exempts part of credit institutions’ excess liquidity holdings (i.e. reserve holdings in excess of minimum reserve requirements) from negative remuneration at the rate applicable on the deposit facility. This decision aims to support the bank-based transmission of monetary policy while preserving the positive contribution of negative rates to the accommodative stance of monetary policy and to the continued sustained convergence of inflation to the ECB’s aim. All credit institutions subject to minimum reserve requirements under Regulation ECB/2003/9 will be eligible for the two-tier system. The two-tier system will apply to excess liquidity held in current accounts with the Eurosystem but will not apply to holdings at the ECB’s deposit facility. The volume of reserve holdings in excess of minimum reserve requirements that will be exempt from the deposit facility rate – the exempt tier – will be determined as a multiple of an institution’s minimum reserve requirements. The multiplier will be the same for all institutions. The Governing Council will set the multiplier such that euro short-term money market rates are not unduly influenced. The multiplier may be adjusted by the Governing Council in line with changing levels of excess liquidity holdings. Any adjustment to the multiplier will be announced and will apply as of the following maintenance period after such decision is made. The size of the exempt tier is determined on the basis of average end-of-calendar-day balances in the institutions’ reserve accounts over a maintenance period. The exempt tier of excess liquidity holdings will be remunerated at an annual rate of 0%. The non-exempt tier of excess liquidity holdings will continue to be remunerated at zero percent or the deposit facility rate, whichever is lower. The two-tier system will first be applied in the seventh maintenance period of 2019 starting on 30 October 2019. The multiplier that will be applicable as of that maintenance period will be set at six. The remuneration rate of the exempt tier and the multiplier can be changed over time. (Source: European Central Bank)

The Committee on Budgetary Oversight has called for measures which will protect the stability of the local property tax (LPT) revenue, while minimising the exposure of residential property owners to possible increases in the valuation of their properties. In advance of the proposed November 1 revaluation date, an inter-departmental group was established to examine LPT in the context of property price developments. The Minister for Finance has postponed the revaluation process to allow for further consultation. The next revaluation date is now November 1, 2020.  The Committee’s report noted that the Minister for Finance has deferred the revaluation process on two occasions to date, and that this approach is not in line with the recommendations of the Inter-Departmental Review Group.  The Committee’s report explored the scenarios for revaluation in detail, and made recommendations as a means to future-proof the LPT system from the volatility of property prices.  The Committee report also recommends that consideration be given to increasing the deferral income threshold from €15,000 to €18,000 for a single person, and from €25,000 to €30,000 for a couple. Exemptions The Committee endorses the recommendation made by the Review Group to remove the exemptions currently in place for unsold trading stock of builders/developers in May 2013 or properties sold by them between January 2013 and October 2019, and properties purchased by “first-time buyers” in the period between January 2013 and October 2013. The Committee also endorses the recommendation to regularly review all exemptions and to keep the range of exemptions to a minimum.  This will help to maintain a broad revenue base and reduce inequalities. (Source: Oireachtas.ie)

To assist with preparations for the UK's exit from the EU, the Financial Reporting Council (FRC) is writing to audit committee chairs and finance directors setting out some of the generic actions companies should consider in advance of the UK’s exit.  The FRC suggests UK companies check staff that are EU citizens can continue to work in the UK, and consider whether their business may face additional legal, regulatory and/or administrative barriers in the event of a no-deal Brexit. You can read the full letter here. (Source: FRC)

IAASA has published its annual Observations paper highlighting some key areas that warrant close scrutiny by those preparing, approving and auditing 2019 financial statements in the upcoming reporting season including: the impact of new accounting standards – governing revenue measurement and recognition, lease financing and bad debt provisioning; identification and disclosure of the significant judgements made in preparing financial statements and the sources of estimation uncertainty inherent in those financial statements; the presentation of key performance indicators (KPIs) or alternative performance measures (APMs); and disclosures of the maturity analysis (or ageing profile) of financial liabilities which can indicate the risk that a company will have difficulties in paying its financial liabilities. The 2019 Observations paper may be accessed here. Source: IAASA

Making an impression at a new job can be difficult, but Orla Brosnan says anyone can do it in eight easy steps. Starting a new job can be intimidating. You are entering into a new workplace, where you are not only expected to learn the ropes of your new job and deliver excellent work, but you also have to learn the culture and dynamics in your new work place. Here are eight steps to making a good impression. Arrive prepared Making a first good impression starts long before you arrive at your new work place. You should have already done your homework during the interview process, but there is a lot more to learn once you are on the inside. Learn as much as you can about the company. Google the people you will be working with. However, the way to learn the true company culture is not in a book or training video but by seeing it in action, and learning the ropes from your coworkers; they will teach you the way things really work in the company. Your coworkers are your life line in your new job. Positive attitude Nothing works better at making a great impression than having a positive attitude. Let your enthusiasm for your new job shine through with your interactions. Leave personal problems at home. For each person you meet, try to collect a business a card or jot down a few notes and fact about them. Occasionally study the notes as a reminder of the new people on the team. This trick can help familiarise yourself with team members at a faster pace. Dress for success Wearing clothes you feel confident and polished in at work can affect your posture, your mental well-being and how others interact with you. Check the dress code for the office. If it is normal business attire, invest in a new well-tailored suit, ensure your trouser or skirt length is appropriate and your shoes are polished and in good condition. Personal grooming is essential. Ensure good posture and open body language, and greet everyone with a smile. Ask questions Never be afraid to ask questions and take notes. You might feel like you are a nuisance, but they will appreciate the fact that you are making an effort to learn. If you have a lot of questions, it might be best to schedule a short meeting to discuss at a convenient time. Getting to know the decision makers By identifying and getting to know the key players in the company, you will get a sense as to how they will influence your job and career. They are instrumental in your career progression, promotions and pay rises – they may even be a future mentor. By getting to know them from the very beginning, will make a lasting impression and will be sure to be on their radar. Stay away from office politics Stay away from office politics for as long as you can. On your first day, listen 90% of the time and talk just 10% of the time. If you have a legitimate contribution, make it; if not, just listen to those around you. Track your accomplishments From the very start of your new job, track your accomplishments. There may be so many different projects going on that it becomes difficult to remember everything you have accomplished over time. This is very important for your annual review process and wise to start early. Say thank you Show your appreciation to everyone who helps you learn the ropes in your first few days, from your coworkers to receptionists to human resources. Be considerate, respectful and honest with others in your work environment. Mind your manners and be courteous at all times. Remember: relax, keep an open mind, get to know your team members, do every task to the best of your ability. This is what will help you go far and make a lasting impression. Orla Brosnan is the CEO of the Etiquette School of Ireland. 

It’s that time of year again. On 8 October, Paschal Donohoe will deliver (a likely no-deal) Budget 2020. John Fitzgibbon has made a few budget predictions ahead of the big day. Budget 2020 will likely bring about several changes which will have a significant impact on Irish companies and individuals. Here are a few we’re likely to see on 8 October. Anti-hybrid legislation Undoubtedly, the most complex of these changes will be the introduction of anti-hybrid legislation as required by the EU’s Anti-Tax Avoidance Directive (ATAD). These rules look to eliminate hybrid mismatches arising from the differing characterisation of certain instruments or entities for tax purposes. Hybrid mismatches can lead to a “double deduction” outcome whereby a deduction is obtained in more than one jurisdiction for the same expense, or a “deduction without inclusion” outcome whereby a deduction is obtained by the payer in one jurisdiction without the corresponding income being taxed in another jurisdiction. The new anti-hybrid rules will effectively operate by denying the deduction in one jurisdiction or through the application of a tax charge where such mismatches arise. Changes to transfer pricing rules From a corporation tax perspective, there will be the introduction of new transfer pricing rules which will align our current rules with the latest 2017 OECD Transfer Pricing Guidelines, as well as broaden the scope of transfer pricing in Ireland. The Department of Finance recently released a feedback statement which provided some insight into the proposed changes. This will, among other changes, broaden the scope of transfer pricing rules to small- and medium-sized enterprises (SMEs,) as well as to some non-trading transactions. KEEP, CGT Entrepreneur Relief and EII This year also saw public consultations on a number of Irish tax regimes such as the Key Employee Engagement Programme (KEEP) regime, the CGT Entrepreneur Relief and the Employment and Investment Incentive (EII) scheme, which could indicate that the Budget will introduce changes to these initiatives. KEEP was initially introduced as part of Budget 2018. It offers SMEs a means of competing with larger enterprises when it comes to attracting and retaining key employees. While it seems unlikely that the regime would extend beyond the SME sector, we would expect to see some changes to encourage a higher level of uptake in the participation of the scheme. CGT Entrepreneur Relief encourages entrepreneurs to set up businesses in Ireland by offering a reduced rate of CGT on the disposal of their shares, subject to a few qualifying conditions. The current lifetime limit on which CGT Entrepreneur Relief can be claimed is €1 million. In contrast, under the corresponding UK regime, the lifetime limit available to shareholders is £10 million. This represents a significant advantage to entrepreneurs who establish their business in the UK and, as such, changes could be introduced as part of the Budget to bring this more in line with the UK regime, thereby increasing the attractiveness of Ireland as a competitive location of choice for entrepreneurs..     The EII scheme offers investors tax relief of up to 40% for investments made in particular corporate trades, with 30% of the relief available upfront and the remaining 10% available after three years, assuming qualifying conditions are met. Significant changes were made to the scheme in Budget 2019 and, therefore, it seems likely that any further changes would be minimal. Capital acquisition tax It's possible we could also see an increase to the Group A lifetime threshold for capital acquisition tax, as the Government aims to restore the €500,000 lifetime threshold. John Fitzgibbon is a Tax Manager in Deloitte. Chartered Accountants Ireland is again offering a Budget Summary service to members, with print and digital options available. Click here to order.