At the most recent meeting of the TALC Direct and Capital Taxes Sub-Committee which took place last week, Revenue provided an update on various matters. The full minutes of this meeting will be available in due course on Revenue’s website, where minutes of all previous meetings are also available. Below we include a brief summary of some of the key issues discussed.
Guidelines to assist businesses to determine correct employment status classification
The group was informed that a significant update to the Tax and Duty manual on the employment status of workers will be published in the coming weeks. The guidance is being drafted following the recent Supreme Court decision in Karshan.
Requirement to file a stamp duty return under section 31C SDCA 1999
Section 31C is an anti-avoidance measure introduced in Finance Act 2017 on foot of the increase in the stamp duty rate from 2 percent to 6 percent (now 7.5 percent) applying to sales and transfers of non-residential property. Where section 31C SDCA 1999 applies, a rate of 7.5 percent of stamp duty arises on the transfer of shares. The general de minimis provision exempts shares of less than €1,000 from stamp duty. Revenue noted the relief in Schedule 1 is not an administrative relief. However where there is a sale of shares under section 31C, a return is required even where there is no tax to pay, even if the stamp duty arising is below €1,000.
Guidance for social media influencers and content creators
Revenue advised that it is in the process of preparing guidance addressing the taxation of social media influencers and content creators. At the meeting, Revenue advised that the taxation of people in these industries follows fundamental principles of taxation. Therefore, the extent to which an influencer is carrying on a trade and how that trade is taxed will always depend on the particular facts and circumstances of each case. Nevertheless, guidance will be welcome given this is a new area of industry.
Updated guidance on section 80 SDCA 1999
There was a detailed discussion on Revenue’s latest guidance on section 80 SDCA 1999 on reconstructions or amalgamations of companies. Section 1.1 in the TDM defines the meaning of “undertaking”. The prior version of the guidance suggested that the transfer of a 100 percent shareholding met the definition of “undertaking”. However, the latest amendment introduces an ‘active ownership’ test. Revenue noted the updated TDM was designed to be more detailed and useful. The ‘active ownership’ element was included to clarify Revenue’s position. Practitioners noted that a 100 percent shareholding is more likely to be managed at subsidiary level rather than at purchaser level. There was uncertainty as to what ‘active ownership’ means and so practitioners are to revert with examples for consideration.
Leasing guidance
Revenue confirmed that further guidance on the following sections is planned for release in the coming weeks:
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Guidance on section 299 will be sent to TALC for review by the end of March
- Guidance on section 403 & 404 TCA 1997 will be sent to TALC for review by the end of April
- Guidance on section 76E TCA 1997 will be published sometime in April
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