COVID-19: Further tax measures to support businesses impacted by COVID-19 (ROI)

May 05, 2020

Revenue can ‘warehouse’ businesses’ VAT and Payroll tax liabilities that arose on foot of the COVID-19 related restrictions.  This is part of the range of economic measures announced by the Minister for Finance recently. We are yet to see the legislation providing for ‘Revenue warehousing of tax forbearance’ however, we have information from the Department of Finance and further details from Revenue on how this ‘warehouse’ measure is intended to work. The measure is to apply to businesses in all sectors of the economy who have been negatively impacted by COVID-19.

Revenue has confirmed the following:

  • COVID-19 related VAT and Payroll tax debts, due from 1 March 2020 to the date when sectoral restrictions are lifted, will be parked for a period of 12 months
  • no interest will accrue on the tax debts during the 12 month period
  • thereafter, the COVID-19 related tax debts will carry a reduced interest rate of 3% (down from 10%), until the debt is paid
  • the timeframe allowed to pay the ‘warehoused’ debt will be flexible and determined by the ability of the business to pay both COVID-19 related debts as well meeting its ongoing tax liabilities as they arise in the normal course
  • for the warehousing arrangement to apply, all returns must be filed in accordance with the Revenue guidance that has applied since the start of the current pandemic.

The operational details are being finalised and the necessary legislative amendments will be brought forward in Finance Bill 2020 according to the Department of Finance.