The Annual Report on Taxation (previously known as ‘Tax policies in the European Union’) has been published annually by the European Commission since 2016. The report is a detailed analysis of tax systems and taxation policy across the EU. The report assesses progress on tax policies both at Member State level and at EU level and forms the basis for discussion on the present and future of EU tax policy. 

We set out below a range of miscellaneous updates to the following manuals:    Life Assurance Companies - Return of Payments   Jobs and Pensions Service User Manual  PAYE Services: Manage your tax     Life Assurance Companies - Return of Payments (Part 26-06-02)  This manual has been updated as follows:  Links to relevant regulations and legislation have been inserted,  Guidance on submitting returns has been updated,  Contact details for the relevant area of Revenue have been updated, and  Minor updates and clarifications throughout the manual.    Jobs and Pensions Service User Manual (Part 42-04-64)  This manual has been updated as follows:  Screenshots throughout the manual have been updated,  In section 2.1, the instructions for adding an additional job have been removed,  In section 2.2.1, the list of payments for which taxpayers must enter the weekly payment amount now includes three additional payments, and  In section 4, the reference to a second/subsequent job has been removed.    PAYE Services: Manage Your Tax (Part 38-06-04)  This manual has been updated as follows:  The screenshots throughout the manual have been updated, and  Details in relation to tax credits that can be claimed/edited/deleted have been updated. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs Team. HMRC has sent an email setting out an update on the implementation of the Windsor Framework which confirms that the next step in the Windsor Framework (WF) has been delayed until 31 March 2025 hence the new arrangements for parcels and freight movements will now not take effect from next week. From 31 March 2025 (and not 30 September 2024), the green lane will broaden to all UK Internal Market Scheme authorised traders. Full international customs requirements for traders will be removed and simplified procedures will apply. This will specifically affect parcels moving from GB to NI. However, the next step in labelling requirements under the Northern Ireland Retail Movement Scheme will commence from 1 October 2024. We also set out the next phase in the Border Target Operating Model (BTOM). Next phase in BTOM As we approach the end of September, it is now just a short time before the next stage in the Border Target Operating Model (BTOM) commences. From 31 October 2024, phase three of the BTOM commences. From this date, safety and security declarations for EU imports into the UK will come into force. Alongside this, the UK will introduce a reduced dataset for imports. The goal is to reduce duplication in customs declarations. More information and guidance from the UK Government has also been published on the next stage in the WF as follows: Trading and moving goods in and out of Northern Ireland, Check if you can apply for the UK Carrier Scheme, Sending parcels to and from Northern Ireland, Apply for authorisation for the UK Internal Market Scheme if you bring goods into Northern Ireland, Future arrangements for moving parcels from Great Britain to Northern Ireland under the Windsor Framework, and Apply for the UK Carrier Scheme. Miscellaneous updates to guidance and publications Get help using example declarations for imports to Great Britain from the rest of the world Bringing commercial goods into Great Britain in your baggage Apply for approval to import duty-paid excise goods from EU countries into Northern Ireland, bought in an EU member state, as a Tax Representative

Minster for Finance, Jack Chambers, last week published the report of the independent examination of the Standard Fund Threshold (SFT). Following this review, the Government will implement phased increases in the SFT of €200,000 per year beginning in 2026 until 2029; after which the level of SFT will move with the applicable level of wage growth.    The SFT is the limit on the total capital value of an individual’s pension pot before unfavourable tax consequences are realised and has remained at €2 million for the past 10 years.   The Institute, under the auspices of the CCAB-I, responded to the public consultation on the SFT regime in December 2023 and recommended that the SFT should be increased in line with inflation as well as harmonising the treatment of public and private sector pensions when the SFT is breached.   The Minister also confirmed that there would be no change to the rate of chargeable excess tax (CET), currently 40 percent, but that this would be reviewed in 2030.  In relation to lump sums, the threshold for the higher rate of taxation to apply to a pension lump sum will be limited to €500,000 rather than a proportion of the SFT and this change will be introduced in Budget 2025.   Read the Minister's statement announcing the changes.  

In this week’s miscellaneous updates, we bring you news of changes to corporation tax correspondence and the latest Agent Update is available. HMRC has sent a further email on the new alcohol duty digital service and a new guideline for compliance GFC7 Help with Common Risks in Transfer Pricing Approaches has been published. The latest schedule of HMRC live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. Agent Update: Issue 123 The latest Agent Update is available. Get guidance from HMRC if you're a tax agent or an adviser on the following: what an authorised agent can do on a client’s behalf, change of bank details for the Customs Declaration Service, change of bank details for HMRC, machine games duty and gaming duty, and register for Self-Assessment by 5‌‌‌ October‌‌‌ 2024. HMRC changes corporation tax correspondence From the beginning of this month, HMRC is no longer sending corporation tax return and instalment payment reminders, interest statements, or payment receipts. From October 2024, it will no longer send the company’s appointed agent a list of issued notices to deliver a company tax return. There are also plans to trial not sending some return and payment reminders. More information is available in the August 2024 Agent Update.

Revenue has become aware of a recent spate of fraudulent emails and texts purporting to have been sent by Revenue. The communications seek personal information and financial information in connection with a tax or wage subsidy refund. Revenue has reiterated that it never sends emails or texts seeking personal information from taxpayers. Revenue has directed taxpayers to its security page for further information. 

The Tribunal Procedure Committee is currently consulting on proposals which would amend the rules for each chamber of the First-tier Tribunals (FTT) (in addition to the Employment Tribunals) in relation to the provision of written reasons for decisions and other case management measures. The proposals which would affect the FTT Tax Chamber include:  a reduction in the time within which discretionary written reasons can be requested; and  amending the rules addressing when full or summary-form reasons are required or available. The closing date for responses is 22 October.

Saturday 5 October 2024 is the deadline to notify HMRC of a new source of income or gain for 2023/24. HMRC recently issued a Press Release highlighting this deadline which also aimed to debunk the top five myths about registering for self-assessment. Those required to register for self-assessment includes anyone who: is self-employed or a sole trader in a business which commenced in 2023/24, is not self-employed but who had a new source of income or a gain in 2023/24, or became a partner in a partnership or any new partnership which commenced in business in 2023/24.  Failure to register by the deadline can result in HMRC charging a failure to notify penalty.  

For several years, Chartered Accountants Ireland has been lobbying the government to either make the Trader Support Service (TSS) permanent or introduce another solution to permanently support the customs intermediaries’ market in Northern Ireland. It is therefore pleasing to see that the TSS will not end on 31 December 2024 as planned but is being further extended to December 2025. A competitive procurement exercise for the next phase of the TSS will also begin by early 2025 which will aim to deliver ongoing support for traders from 2026. The government recognises that the TSS is a key part of the government’s help for businesses adjusting to the new trading environment after the end of the EU transition period. The TSS, a free service, can help businesses save time and money while helping them comply with Windsor Framework requirements. Thousands of businesses have already benefited from using the service’s guidance, training, and support since its launch in 2020. Businesses can sign up to the Trader Support Service and access free online courses and training materials online.

We caught up recently with Marie-Claire McDonnell who has recently returned to Ireland having spent 12 years living and working in Toronto to find out more about the ups and downs of returning home.  1. After 12 years living in Toronto, was there a pivotal moment when you were sure it was time to make the move back to Ireland? We were very happy and settled living in the suburbs of Toronto. My husband (also an Irish accountant) was approached regarding a relocation with his work to their Dublin office. It was a fantastic opportunity for him and a relocation package to your home country is not something that comes up very often. Our three children are still young and we felt it was the right time to move if we were ever going to do it.  2. What was your biggest concern (if any), about moving back and how did you overcome it/them?  I guess the biggest concern is the fear of whether you are making the right decision for everyone in your family. Going from being completely set up in your life after 12 years to starting from complete scratch gets very overwhelming, especially where children are involved. It's important to focus on the reasons for making the move in the first place, the positives of living in Ireland versus abroad.  3. What advice would you give to a member who is at a similar stage?  Preparation is key. Making a list of all the big ticket items that need to be done and working through it with a long lead up time. We had a good six months to prepare before leaving Canada. It is also really beneficial to speak to people who have made a similar move and understand the pain points and the processes involved for various items. I was lucky to have some friends who made the move back before us who I leaned on for advice. Finally, what really helped us moving with small children was that I could take unpaid leave for a few months after we arrived to help get everyone settled. It really helped our family with the transition.  4. What do you think you will miss most about Toronto?  We miss our friends a lot – that is the hardest part. We are lucky that Toronto is very accessible from Dublin so we will be back again soon for a visit.  5. What do you appreciate most about being back in Ireland?   We love being closer to family. When you live abroad you spend most of your holidays coming back to Ireland to visit family and friends. There are lots of options in Ireland for mini breaks and also Europe is on our doorstep so we look forward to many years of fun holidays exploring. 6. What is next for you? I was also very lucky to transfer my role with my employer to their Dublin office. I took the summer off so am now settling back into work and real Irish life!! Our final step is to buy a house which we hope to do in the next year.  Marie-Claire McDonnell on LinkedIn      

Roundup 20 September 2024 Welcome to the latest edition of Technical Roundup which is published on the first and third Friday of every month. In developments since the last edition, the International Accounting Standards Board has announced the start of a research project to review and improve the requirements for the statement of cash flows and related matters in IFRS Accounting Standards. The Department of Enterprise, Trade and Employment has recently confirmed changes to the procedure for notifying the Minister of proposed collective redundancies, pursuant to section 12 of the Protection of Employment Act 1977. Read more on these and other developments that may be of interest to members below. Financial Reporting The Financial Reporting Council (FRC) has published new September 2024 editions of UK and Irish financial reporting standards. These standards consolidate all recent amendments to the standards, including the amendments arising from the recent periodic review of the standards. The following September 2024 publications are included on the FRC website. Overview of the financial reporting framework FRS 100 Application of Financial Reporting Requirements FRS 101 Reduced Disclosure Framework FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland FRS 103 Insurance Contracts Implementation Guidance to accompany FRS 103 Insurance Contracts FRS 104 Interim Reporting FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime The European Financial Reporting Advisory Group (EFRAG) has issued its August 2024 Update. This report summarises the public technical discussions and decisions taken in the past month as well as open consultations, future events and vacancies. EFRAG has published its feedback statement on its response to the International Accounting Standards Board’s (IASB’s) exposure draft Contracts for Renewable Electricity (proposed amendments to IFRS 9 and IFRS 7). The feedback statement summarises constituent’s feedback, including responses to EFRAG’s draft letter and outreach activity findings. The International Accounting Standards Board (IASB) has announced that it is starting a new research project designed to review and improve the requirements for the statement of cash flows and related matters in IFRS Accounting Standards. The IFRS Interpretations Committee (IFRIC) has released its September 2024 update which summarises the decisions reached in its public meeting on 10 September. During the meeting, IFRIC considered requests received in relation to the following matters; Guarantees issued on obligations of other entities Recognition of revenue relating to tuition fees The IASB has proposed amendments to IAS 28 in its exposure draft Equity Method of Accounting – IAS 28 Investments in Associates and Joint Ventures. The proposed amendments add to and clarify how to apply the equity method by answering application questions that the IASB has received over several years. The consultation period remains open until 20 January 2025. The UK Endorsement Board (UKEB) Survey response deadline on IFRS 18 Presentation and Disclosure in Financial Statements has been extended to 30 September. In its Autumn 2024 Joint Committee Report, the three European Supervisory Authorities (EBA, EIPOA and ESMA) have warned national supervisors of the financial risks stemming from economic and geopolitical uncertainties. Auditing and Assurance The International Auditing and Assurance Standards Board has published a report, Balancing Effectiveness and Timeliness in Audit and Assurance Standard Setting.  This report gives an overview of the IAASB’s progress in addressing key public interest issues and reiterates its strategic direction to continue bolstering confidence in audits and assurance engagements. The Financial Reporting Council welcomes the Government tabling legislation in Parliament on 9 September 2024 to address the significant delays in local authority audits. This follows the Written Ministerial Statement issued on 30 July 2024. Insolvency The Department of Enterprise, Trade and Employment has recently confirmed changes to the procedure for notifying the Minister of proposed collective redundancies, pursuant to section 12 of the Protection of Employment Act 1977, as amended. These changes took effect from 1 July 2024. More information is available on our website. Readers may want to take note of a recent UK High court judgment in connection with the collapse of the retailer British Home Stores (in 2016) and the findings made against individual directors in relation to Wrongful Trading Claims, a Trading Misfeasance Claim and Individual Misfeasance Claims. Two of the directors were each ordered to make a contribution of £6.5m (roughly 15% of the total) to the companies’ assets, on a several liability basis and another director was ordered to make a contribution of £21.5m to the companies’ assets. Please click for an article by UK law firm Burges Salmon which analyses the judgment in detail and the article provides a number of key takeaways for directors of distressed businesses as follows: Navigating duties during times of financial difficulty has never been more complex or potentially risky Directors must ensure that they are up to the task Professional advice is a key protection, but the court will view it in context Board minutes in a distressed situation must be a faithful record of proceedings Directors exercising limited functions may not abdicate decisions for the whole board Directors should not assume that they will be shielded by insurance Please also click for an article by UK law firm Jones Day on the BHS judgment in particular their closing comment that …”. While the BHS facts are relatively extreme, the fact that directors were found liable to such an extent, when in some cases they were earning around £150,000 a year and (at least in one case) had limited involvement at board level, is a warning to all directors of companies facing financial pressure”.  Sustainability EFRAG held its Sustainability Board meeting on Tuesday 17 September 2024. The Hong Kong Institute of Certified Public Accountants (HKICPA) has published two exposure drafts (EDs) for sustainability reporting standards that are fully converged with IFRS S1 and IFRS S2. The comment period for the EDs ends on 27 October 2024. The Institute is holding a webinar on the CSRD on Wednesday 25 September which features Orla Carolan from Future Planet and Mike O’Halloran to understand more about the practical challenges of implementing the CSRD. This includes an overview the steps involved in conducting a double materiality assessment and what to do next around data collection, disclosure and reporting. Please register here to attend. In its recent ESRS Perspectives series, Accountancy Europe look at the European Sustainability Disclosure Standards (ESRS) development process. In this publication they have summarised the ESRS processes and listed the various ESRS support materials from the European Commission and EFRAG. This will provide users and preparers a useful insight into how the standards have been developed. Sanctions and anti-money laundering The UK government recently announced the launch the Office of Trade Sanctions Implementation (OTSI), within the Department for Business and Trade, in October 2024.  Click here also for further information. To equip the office with new civil enforcement powers, on 12 September 2024, the UK government passed the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024. Click for the explanatory memorandum. OTSI’s enforcement powers come into effect from 10 October 2024. They will apply to all UK persons including businesses wherever they are in the world and any person including businesses in the UK or the UK territorial sea. The regulations introduce new civil enforcement powers, including the power to impose monetary penalties, for breaches of aircraft, shipping and certain trade sanctions. The regulations also give the Secretary of State the option to publish reports where a breach of sanctions regulations has occurred. Click for statutory guidance on the Trade, aircraft and shipping sanctions, civil enforcement. Please click for the latest UK Financial Intelligence Unit SARs in Action magazine, Issue 27. Articles include a look at the UK cross system strategy to tackle professional enablers (individuals or organisations which are providing professional services that enables criminality). The publication also includes some case studies on suspicious activities reports made to UKFIU and an article on “virtual squatting”. The UK National Economic Crime Centre (NECC) recently published its annual report for 2023-2024. It includes some interesting case studies on the takedown of one of the biggest online marketplaces selling stolen credentials to criminals, an investigation into international Cash-Based Money Laundering controller network and case study on the crackdown on romance fraud. Charities news The NI Charity Commission has enhanced the security of Online Services - documents submitted  must not now include special characters in their names. Communities Minister, Gordon Lyons MLA, has appointed Leanne McCullough as a Commissioner to the Board of the Charity Commission for Northern Ireland with effect from 15 August 2024 to 14 August 2029. Central Bank of Ireland news On 18 September 2024 the Central Bank of Ireland (CBI) issued its latest Quarterly Bulletin for Q3 2024. You can read about the latest trends and the outlook for the Irish Economy, an article on economic policy issues in the Irish housing market and an item about climate change in the financial sector. The focus of the climate change article is on describing the new analytical indicators of carbon emissions for financial institutions resident in Ireland. In September 2024, CBI published a page dedicated to frequently asked questions on Markets in Cryptoassets Regulation (MICAR) divided into sections on authorisations, expectations, policy and virtual asset service providers. Government legislation programme Autumn 2024 The Government has published its legislative programme for Autumn 2024. Read the press release here and the contents of the programme here. Since the last publication in April, we have reported on draft legislation and enactments of relevance to members. For example, the Charities (Amendment) Act 2024 which has been enacted and awaits commencement. Also, the Irish Dept. of Finance published the Finance (Provision of Access to Cash Infrastructure) Bill 2024. The Companies (Corporate Governance Enforcement and Regulatory Provisions) Bill has been published and is currently being considered in the Dail. Heads of Bill of the National Cyber Security Bill were published in July 2024. This legislation is to transpose EU Directive 2022/2555 which all EU member states are required to transpose in full by 17 October 2024. Also, heads of bill have been published for the Miscellaneous Provisions (Registration of Limited Partnerships and Business Names) Bill which bill will reform the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963, strengthening Ireland’s regulatory framework and responding to concerns raised in relation to the transparency of Limited Partnerships. Other draft legislation of note in the Autumn legislative programme is the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill which is heads in preparation, and which is stated to amend the 2010 Act to ensure that Crypto Asset Service Providers are covered by national law in relation to Ireland’s Anti-Money Laundering and Terrorist Financing regime. Also heads in preparation is the Regulation of Artificial Intelligence Bill which will provide for, the designations of Competent Authorities, and penalties, to comply with Ireland’s obligations under Regulation (EU) 2024/1689 laying down harmonised rules on artificial intelligence (Artificial Intelligence Act). Other On 11 September 2024, the Property (Digital Assets etc) Bill was introduced into the UK Parliament. The press release issued on publication of the Property (Digital Assets etc) Bill noted that it will mean that for the first time in British history, digital holdings including cryptocurrency, non-fungible tokens such as digital art, and carbon credits can be considered as personal property under the law. The Bill will also ensure Britain maintains its pole position in the emerging global crypto race by being one of the first countries to recognise these assets in law. Click to read the Bill and the explanatory memorandum. Read details of the UK Law Commission’s work on digital assets here. Companies House in the UK has recently posted a blog on “Authorised Corporate Service Providers [ACSPs]: what you need to know”. Readers may recall that identity verification is a core pillar of the Economic Crime and Corporate Transparency Act 2023 under which Act Companies House will be required to verify the identity of anyone who is submitting information to the public register, including those acting on behalf of a company. The blog gives some information on ACSPs including standards to become an ACSP and registering to become an ACSP.   This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.

Ethical conduct is not a “nice to have” for accountants, but a crucial professional competence, writes Professor Patricia Barker  Global Ethics Day will be celebrated on 16 October 2024. This initiative, founded by the Carnegie Council for International Affairs, is now in its eleventh year. This year’s theme is “Ethics Empowered”. The Consultative Committee of Accountancy Bodies (CCAB) Ethics Group believes it is important to reflect on the significance of ethics for the accountancy profession and to emphasise three key messages: 1. Empower through education and self-reflection Ethics should be viewed as a professional competence. This requires accountants to undertake regular CPD on ethics, self-reflection activity, and to familiarise themselves with frameworks to guide their ethical decision-making. 2. Be true to ethical values and model ethical behaviour Compliance should not be confused with ethical behaviour. 3. Follow your North Star Accountants should always use the five fundamental ethics principles, as set out by organisations such as Chartered Accountants Ireland, as well as the duty to act in the public interest as their constant navigation tool when facing an ethical dilemma. Ethics vs compliance In every sphere of professional activity, accountants, and the clients they work for, must deal with an ever-increasing tide of regulation. In addition to financial reporting and auditing standards – and alongside legislation governing taxation, anti-money laundering and sanctions – the profession is expected to be familiar with legislation, standards and regulations ranging from those relating to employment, competition and procurement to sustainability, data protection and corporate governance. This is the price to pay for being a trusted advisor. So great is the volume and weight of regulation today, however, that it pervades much of the profession’s decision-making and innovation.  More than just compliance It is important that accountants do not become complacent and that they remember that professional ethics is about much more than mere compliance. Indeed, they may be so preoccupied with gathering evidence of compliance, that they fail to reflect properly on the reality of the rightness and wrongness of actions and the decisions they take.  Dilemmas facing accountants can be regarded, broadly, as either regulatory or judgemental in nature.  Law and regulation provide the framework for ensuring compliance with regulatory issues.  As the body of rules and regulations grows unevenly across different jurisdictions, however, opportunities for regulatory arbitrage increase, potentially distorting markets. More importantly, not all dilemmas can be dealt with directly by a clear regulation. Ethical issues that fall outside clear rules must be judged in the context of the value framework the individual professional believes in.  This framework is provided by the ethical education and self-awareness of the accountant, supported by a Professional Code of Ethics and experiential/reflective learning.  The role of personal values In determining how to deal with any ethical dilemma, the accountant will be strongly influenced by their individual moral perspective. When considering whether a particular action is potentially good or bad, some accountants may prefer to emphasise the ultimate outcome, taking the view that the end will justify the means.  Others may believe that the action itself must be judged, rather than its consequences. Still others may believe that humans are inherently self-centred and competitive, and will make decisions in their own interests, albeit complying with the law.  Ethical behaviour, therefore, requires that each professional accountant undertakes detailed self-reflection to fully understand how their values influence their approach to decision-making and how they are likely to react under pressure. When there is a conflict between our conscience, our ethical reasoning, the requirements of our workplace and our limited ability to influence outcomes, cognitive dissonance is inevitable. Ethical self-reflection and close scrutiny of the guidance provided by the Code of Ethics for Professional Accountants can help the professional accountant forge a trajectory to ethical decision-making when under pressure. Importance of Code of Ethics for professional accountants Professional accountants who are members of one of the bodies comprising the CCAB must adhere to the Code of Ethics for Professional Accountants. This includes the International Independence Standards issued by the International Ethics Standards Board for Accountants (the Code). Perhaps inevitably, to accommodate the increase in regulation and standards, the Code has expanded exponentially in recent years. However, it is important to remember that the application material and more detailed sections of the Code are simply an expansion of the five fundamental ethics principles. Professional accountants should be guided not merely by the terms but also by the spirit of the Code. These principles, together with the overarching professional duty to act in the public interest set out in the Code, are broad enough to deal with most of the challenges accountants face in their daily professional lives – particularly when combined with informed ethical self-reflection. This article was written by Professor Patricia Barker, FCA, Lecturer of Business Ethics at Dublin City University, on behalf of the Consultative Committee of Accountancy Bodies

Budget 2025 needs to tackle rising business costs, tax complexity and housing shortages to enhance Ireland’s global competitiveness and support domestic and foreign enterprises, writes Tom Woods On 1 October, Budget 2025 should prioritise addressing key competitive challenges in the Irish economy, such as attracting, supporting and scaling Irish and foreign businesses, as well as tackling rising employment costs, international talent competition, and affordable housing availability. Tax simplification Ireland is facing a rapidly changing global tax environment, and the outcome of the US elections could significantly impact this environment and Ireland's attractiveness as an investment location. US tax measures designed to lower the US corporate tax rate to one more comparable with OECD peers and to protect the US tax base are scheduled to expire at the end of 2025. Despite this uncertainty, Ireland has a unique chance to present itself as a stable and secure destination for FDI. It is vital the opportunity is taken in Budget 2025 to introduce measures that will strengthen Ireland's competitive edge and attractiveness for inward investment. Ireland needs a broad and flexible participation regime that will support it as an international holding company location. We have called for introducing a participation exemption for foreign dividends to complement the participation exemption in place for capital gains. A branch exemption should also be introduced. Simplification of the tax code needs to be a priority in Budget 2025 to support enterprise and entrepreneurship. According to the KPMG Enterprise Barometer 2024, six in ten domestic businesses and entrepreneurs are concerned about the administrative complexity associated with the Irish tax system, particularly for smaller enterprises and entrepreneurs. Our pre-budget submission calls for the establishment of an Office for Tax Simplification to review the tax code, remove duplication, and simplify the system. By doing so, we can drive reform of overly complex tax rules that are adding to the cost of doing business and compromising competitiveness. This is particularly important now that the 12.5 percent corporation tax rate is less of a competitive advantage. SME investment SMEs employ more than 1.2 million people and are critical to our economic success, so they need access to capital and talent to develop and grow their businesses. Enhancements to the Key Employee Engagement Programme (KEEP) and the Special Assignee Relief Programme (SARP), as well as introducing a super deduction for payroll costs of highly skilled technology workers would help level the playing field for SMEs competing with multinational corporations in a tight labour market. Budget 2025 could also incentivise investment in SMEs by simplifying the Employment Investment Incentive Scheme (EIIS) and enhancing Capital Gains Tax (CGT) Entrepreneur's Relief. It is also critical to reverse the changes made to the CGT Retirement Relief in the last Finance Act. The availability of CGT retirement relief is vital to the development of multi-generational family-owned businesses and farms. These businesses and farms are the bedrock of the Irish economy, employing millions. Last year's changes will operate as a barrier to the transfer of Irish businesses and farms to the next generation. Employment cost reduction Ireland's high cost of employment has become a real concern for domestic businesses and foreign investors. Budget 2025 should introduce measures to reduce the cost of employment. Ireland needs a personal tax regime that attracts and retains skilled individuals. This is important for Irish and foreign-owned companies assessing Ireland as an investment location. The entry point to Ireland's marginal income tax rate is uncompetitive compared to many other jurisdictions, making it difficult to attract talent and highly skilled workers. We recommend raising the point at which the marginal rate applies to €50,000. We also recommend the introduction of an earnings cap of €75,000 on Employee PRSI and €100,000 on Employer PRSI, similar to social security caps in other countries, increasing workers' take-home pay, helping employers manage employment costs and supporting businesses growing and developing talent. Housing crisis The housing crisis is adversely impacting Ireland's attractiveness for investment. According to new data from the Central Statistics Office, 69,000 people emigrated from the Republic of Ireland in the 12 months to April 2024, the highest level of emigration since 2015. There were also significant inflows, but this is a missed opportunity to keep talented people in the Irish labour market. Several budgetary measures could be introduced to increase the housing supply, including incentivising employers to build and provide residential accommodation to employees with a corresponding benefit-in-kind (BIK) exemption for employees earning less than €50,000. Reintroducing a targeted and controlled form of Section 23 relief could also encourage the conversion of properties above retail units to residential use and encourage individuals to finance the development of new residential units for letting. Green technology Our ambitious climate goals will undoubtedly present challenges and opportunities for individuals, communities, and businesses. Tax policy could be used as an effective tool to encourage innovation in green technologies to help us meet these targets. The Government has several challenges to address, but strong exchequer returns should put the Government in a good position to deliver on a budgetary package of €1.8 billion in additional spending and €1.4 billion in tax measures as set out in the Summer Economic Statement.  Tom Woods is head of tax at KPMG in Ireland

Selling a business is a complex process and accountants have a crucial role to play in ensuring their clients achieve the optimal financial outcome. Niall Gaughan explains how As the financial landscape continues to evolve, accountants in Ireland are finding themselves at the forefront in helping to guide clients through the intricate process of selling a business. Beyond the immediate considerations of the sale itself, the post-sale period is critical to ensuring optimal financial outcomes. In this article, we explore the key elements accountants should consider when advising clients on selling a business, focusing on the importance of securing future financial stability, fostering strategic partnerships and succession planning. Anticipating the post-sale landscape Accountants must highlight the importance of proactive planning before a sale. Understanding the details of the financial landscape post-sale allows business owners to make informed choices that can have a significant impact on tax responsibilities, wealth preservation and overall financial health. This can help to ensure that clients are well-equipped to navigate any complexities that may emerge after the deal closure. Securing future financial stability Securing future financial stability post-sale is a critical consideration for both business owners and their advisors. Central to this endeavour is expert tax advice. Accountants play a pivotal role in guiding clients towards understanding the tax implications associated with a business sale. By carefully examining available reliefs, exemptions and allowances, accountants can help maximise after-tax returns, providing a solid foundation for the future. For instance, a comprehensive understanding of various reliefs can lead to substantial tax savings, laying the groundwork for securing the financial future of both the seller and the business. Fostering strategic partnerships When navigating the complexities of a business sale, fostering strategic partnerships is crucial. Accountants must pay careful attention to the strategic structuring of the sale, assessing alternatives such as selling shares or assets with a keen eye on the potential implications for both buyers and sellers. By leveraging their expertise and collaborating closely with other advisors, accountants can help clients select a structure that not only aligns with their financial goals but also fosters long-term strategic partnerships. These partnerships are crucial because they can provide significant tax advantages and facilitate a seamless transition process. Moreover, by aligning the interests of all parties involved, strategic partnerships lay a strong foundation for ongoing collaboration, which is essential for future growth and success. Securing the future beyond the sale Post-sale success is not solely contingent on immediate financial gains. Accountants should advocate for robust succession planning, especially within family businesses, considering factors such as family dynamics, business continuity and long-term financial objectives. By engaging in proactive succession planning, clients can safeguard their wealth, ensuring its sustained growth and the realisation of personal and family goals. This approach not only secures the financial future of the business but also aligns with the long-term vision and values of the family, setting the stage for continued success across generations. A strategic partnership for wealth management In the post-sale phase, a private banker with specialised competencies can support the unique requirements of handling the proceeds from a business sale. The business owner’s accountant can play a key role in selecting a private banker suited to their unique needs. Their competencies should include: Wealth preservation expertise: A private banker who understands wealth preservation strategies can help the client build a lasting legacy. Investment strategy: Competent private bankers should be adept at devising investment strategies aligned with the client's risk tolerance and financial goals, ensuring the continued growth of their wealth. Diversification and risk management: A private banker should be able to assist clients in diversifying their investment portfolio, mitigating risks associated with concentrated assets and optimising long-term returns. Personalised service: The ability to craft personalised financial plans that encompass the client's lifestyle, philanthropic aspirations and intergenerational wealth transfer, is a key competency for a private banker in this context. Clients are now keen to understand more about philanthropic options and sustainability. A good private banker should be able to facilitate access to deep knowledge and subject matter experts in these areas. Clients need a secure financial institution with a strong credit rating that offers immediate returns on their funds post-sale. Confidentiality and direct access to a private banker can help, as they will have access to expertise in financial markets and the ability to educate clients who are often experts in their fields – but not necessarily in financial management. Ensuring post-sale success The role of the accountant supporting a client through a business sale extends beyond the realms of financial statements and tax calculations. By proactively addressing the considerations outlined – expert tax advice, strategic structuring, succession planning and selecting the right private banker – accountants can guide their clients towards post-sale financial triumph. Niall Gaughan is a Director with Barclays Wealth in Dublin

Comments from Cróna Clohisey, the Institute’s Director of Advocacy and Voice in relation to Ireland’s tax base and our tax system appeared in a recent piece in The Sunday Times. 

Revenue has published the Pre-filing Notification Forms for the R&D Tax Credit. Companies are now required to notify Revenue of its intention to file a claim for the R&D Tax Credit for accounting periods commencing on or after 1 January 2024. The pre-filing notification must be in writing in the form prescribed by Revenue and must be filed at least 90 days before the claim for the credit is made. The forms are available on Revenue’s R&D Tax Credit page and at the links below:  Research and Development pre-filing form 766C  Research and Development pre-filing form 766D 

As readers will know, the Tax Administration Liaison Committee (TALC) is the forum where practitioners can make recommendations to achieve more effective and efficient tax administration. The Institute attends TALC under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I). There are several committees operating under TALC. Below we bring you updates from recent meetings of Main TALC, the TALC Indirect Taxes Sub-committee, and the TALC Direct and Capital Taxes Sub-committee.  Main TALC  The September meeting of Main TALC took place last week at Revenue’s Bishop’s Square offices. The agenda included an update from Revenue Technical Services (RTS), Enhanced Reporting Requirements (ERR), and Pillar Two. At the meeting we also raised the matter of customer service standards, noting certain issues which have been brought to our attention by members in recent months. Revenue acknowledged our concerns and committed to a full discussion at the December meeting of the group. We also noted the ROS downtime on Saturday 7 September.  On RTS, Revenue informed the group that it will be hosting webinars on 26 and 27 November 2024 to assist taxpayers making submissions to the RTS. The purpose of the webinars is to enhance the quality of submissions made to it and input has been sought from Main TALC on specific areas of focus for the webinars. The group noted that the webinars will be of great benefit to taxpayers.  Regarding ERR, Revenue updated the group on returns submitted to date. The latest data shows that returns have been made by 41,797 employers for around 665,000 employees representing in-scope benefits of €975 million. The majority of the payments made relate to travel and subsistence.  Lastly, on Pillar Two, Revenue noted that it is significantly increasing its resources to manage Pillar Two. There has also been a significant body of work throughout the summer to prepare for the commencement of Pillar Two compliance cycles in 2025.  TALC Indirect Taxes Sub-committee  At the recent meeting of the TALC Indirect Taxes Sub-committee, the group discussed various matters including issues arising with RCT and the VAT reverse charge mechanism, the status of the EU VAT in a Digital Age (ViDA) file, the recent VAT Modernisation (VATMod) consultation, and the categorisation of certain psychotherapeutic and counselling services for VAT purposes.  On the status of ViDA, Revenue officials noted that at the ECOFIN meeting in June, a Member State had exercised its veto due to a perceived issue with the “deemed supplier” obligations. A further update will hopefully be available at the next meeting in November.  Regarding the recent VATMod consultation, Revenue informed the group that a findings’ report issued. In total, there were 1,100 responses. The group agreed to arrange a meeting to discuss the findings’ report and Revenue acknowledged the quality and breadth of feedback provided.  TALC Direct and Capital Taxes Sub-committee  At the recent meeting of the TALC Direct and Capital Taxes Sub-committee, the group discussed various matters including RCT and the VAT reverse charge mechanism, the review process for Tax and Duty Manuals (TDMs), the tax treatment of Islamic financial transactions, TAC determination 44TACD2024, and the requirement to provide a breakdown of distributions from an Approved Retirement Fund (ARF), as well as various guidance updates.  The issue regarding RCT and VAT reverse charge relates to a question on the part of an RCT contract which the VAT reverse charge applies to. Revenue noted that the reverse charge only applies to construction services. The matter is also being considered by the TALC Indirect Taxes Sub-committee and officials from Revenue are aware of the discussions in both groups.  On the TDM review process, practitioners noted that issues with wording applied to TDMs while under review. There is a concern that the phrase, “The guidance may not reflect Revenue’s current position” is too broad. In the absence of a specific explanation on what is actually under consideration at a particular time, it casts any technical position into uncertainty until such time as the manual is refreshed or reinstated. Revenue will consider betters options in this regard but also noted the importance of appropriate wording.  In relation to 44TACD2024, practitioners queried whether this would influence Revenue’s approach to dealing with ARFs. Revenue noted that the case was determined on its facts and does not have precedential value. 

Last week, the Court of Justice of the European Union (CJEU) handed down the final judgment in Commission v Ireland (C-465/20 P). The case concerned tax rulings provided to two companies in the Apple Group which approved the methods used by those companies to determine their taxable Irish profits in relation to the trading activity of their respective Irish branches. In 2020, the General Court annulled the Commission’s decision that the tax rulings constituted illegal State-aid.   The Commission appealed the decision and in November 2023, Advocate General Pitruzzella’s opinion recommended that the CJEU should set aside the judgment of the General Court and refer the case back to that court. Rather than referring the case back to the General Court, the CJEU instead gave final judgment in the matter and so the matter is now concluded. In a press release issued last week, it was noted that  the CJEU “considers that the state of the proceedings is such that it may give final judgment in the actions”.  In a statement issued last week, the Minister for Finance, Jack Chambers TD noted that the country’s tax system is built on certainty and predictability. The minister acknowledged that many of the largest multinational companies operating in Ireland have been doing so for many decades and are significant employers. He also observed that the global tax environment has changed dramatically over the last decade and that the Irish Government has been at the forefront of these developments.  In a subsequent press release on the Escrow Fund (in which the contested taxes have been held), the Department of Finance noted that the funds will be released following the issue of tax assessments by the Revenue Commissioners. In relation to the matter of a third country adjustment (i.e., where overseas’ tax authorities deem tax to be arising in their country), the department stated it was not aware of any such claims at this time. 

Does your Northern Ireland based company or client support a lower rate of corporation tax for the region? If so, read on for how you can participate in our campaign to reignite the path to a lower rate of corporation tax for the region.   The Corporation Tax (Northern Ireland) Act 2015 contains the legislation for how a lower rate of corporation tax would work practically in Northern Ireland. However, this is subject to very specific rate-setting arrangements which mean that this rate-setting power may not be exercised unless Treasury regulations have been made. These Treasury regulations are subject to very specific conditions specifically the continued commitment of the NI executive to “take all the actions necessary to demonstrate that its finances are on a sustainable footing for the long term”.  The support of the Institute’s members for a lower rate of corporation tax in Northern Ireland has now waned in recent years with a recent Ulster Society survey showing that approximately two thirds of our members continue to support this initiative.  On foot of this ongoing support combined with the restoration of the Northern Ireland Assembly and a new government in Westminster, Chartered Accountants Ireland is embarking on a new campaign to engage with and equip policy makers with the information and tools necessary to pursue a lower rate of corporation tax for the region as one of a range of economic levers to drive growth and employment.  We are seeking companies in Northern Ireland who support this campaign and who are prepared to tell us why they support a lower rate and what it would mean for them and the region. These quotes will be included in a position paper which is expected to be launched before the end of 2024. Contact tax@charteredaccountants.ie to participate.    

In this legislative update, the Chancellor has confirmed that a tax road map for business will be outlined at the Budget on 30 October and the sunset clauses of the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) scheme have officially been extended to 2035. A date has also been announced for the 2025/26 Scottish Budget.  Business tax roadmap  As part of its pre-election manifesto, the new government promised that a business tax roadmap for the duration of this parliament would be delivered in order to provide businesses with certainty over the coming years when planning investments. Although no specific timetable was provided in the manifesto, this was promised within the first six months.   During recent Treasury questions, the Chancellor has now confirmed that an outline of this roadmap will be published at the Budget. This will include a commitment to cap corporation tax at 25 percent for the duration of the current parliament. Full expensing (100 percent first year allowances for new plant and machinery expenditure of companies) will also be retained.  Given the Chancellor’s comments, it seems that what will be announced on Budget Day will only be an outline of the roadmap which is likely to be finalised thereafter in conjunction with wider stakeholder input.  EIS and VCT scheme sunset clauses extended   Finance Act 2024 extended the EIS and VCT scheme to shares issued on or before 5 April 2035. However, this was subject to domestic and international subsidy obligations being met. It is now confirmed that these formalities have been completed hence earlier this month The Finance Act 2024, Section 11 (Extension of Enterprise Investment Scheme Relief and Venture Capital Trusts Relief) (Appointed Day) Regulations 2024 were laid.   This means that the sunset clauses are now officially extended from 6 April 2025 so that shares in a company (for EIS relief) or in a VCT that are issued before 6 April 2035 will qualify for relief, subject to the relevant conditions being met.  Scottish Budget date   Scotland’s 2025/26 Budget will be presented to the Scottish Parliament on 4 December 2024. This will set out the Scottish Government’s proposals for devolved taxes (such as the Land and Buildings Transactions Tax) and the income tax rates paid by Scottish taxpayers (other than on dividends and interest). It is also expected that the Scottish Government will publish its Tax Strategy on the same day which aims to set out the medium-term objectives for the Scottish tax system.