The Institute, under the auspices of the CCAB-I, made representations on behalf of members at last week’s meeting of the TALC Collections subcommittee. Among the issues discussed, Revenue provided updates on the imminent changes to the obligations of tenants and collection agents of non-resident landlords, the debt warehousing scheme as well as the vacant homes tax. Revenue also informed the group that it intends to no longer accept payment by commercial credit card.
Non-resident landlords
Revenue re-confirmed the position that non-resident landlords must either arrange for their tenant to withhold 20 percent of the rent due and submit it to Revenue or engage a collection agent to collect rent and file a return of income.
Revenue’s new Non-Resident Landlord Withholding Tax (NLWT) system, introduced by way of an amendment in Finance Act 2022, is expected to come into operation on 1 July. 2023. The amendment provides that collection agents who act for a non-resident landlord may deduct withholding tax at 20 percent and remit it to Revenue using the NLWT system. This amendment will relieve the collection agent from being chargeable to tax in Ireland for such income of the non-resident landlord, where the landlord chooses this option.
Revenue has acknowledged that the transition to the NLWT system may give rise to cashflow concerns and advises taxpayers to review their options as to the timing of the transition, if they opt for the new system. In this regard, Revenue has advised that withholding tax operated in 2023 will reduce the taxpayer’s preliminary tax obligations.
The NLWT system requires collection agents or tenants to make rental notifications (RNs) when rent is paid to non-resident landlords while withholding and remitting 20 percent of the rent payment to Revenue. It was noted that there are no restrictions regarding the bank account from which the withholding tax is to be remitted, so long as the withholding tax is operated and returned correctly. Revenue expects the portal to open for remittances from today.
Revenue intends to update the ROS Form 11 2022 Tax and Duty Manual to permit the filing of 2022 returns by taxpayers that are not currently compliant with the legislative requirements applying to non-resident landlords.
We will continue to keep members updated via Chartered Accountants Tax News.
Debt Warehousing Scheme
Revenue reminded the forum that in order for taxpayers to continue to avail of the benefits of the debt warehousing scheme they must file all returns, even Nil returns, and pay current taxes as they fall due,.
At the end of May 2023, the total debt warehoused was less than €2 billion consisting of circa 61,000 taxpayers, 32 percent of which owe less than €100 each. Approximately 6,000 taxpayers owe a combined €1.7 billion.
The debt warehousing scheme is currently in Period 3, running from 1 January 2023 to 1 May 2024, with interest accruing at 3 percent per annum on the unpaid debt. Taxpayers have until 1 May 2024 to agree and phased payment arrangement (PPA) and are reminded that they can make interim payments during this period, and also request a refund be offset against the balance warehoused.
Revenue is encouraging taxpayers to engage now in the phased payment arrangement (PPA) process as there is much flexibility regarding payment terms, amounts and downpayments. A nominal downpayment percentage amount of tax and interest can be applied for initially using the online application system to commence the process of engagement and negotiation. In addition, payment breaks can be arranged once the PPA has been commenced. Revenue wished to remind taxpayers that they will take a flexible and pragmatic approach on a case-by-case basis.
Vacant Homes Tax
Following the introduction of the vacant homes tax (VHT) in Finance Act 2022, the first chargeable period runs from 1 November 2022 to 31 October 2023. If VHT applies to your property for this period, you must submit a VHT return to Revenue by 7 November 2023.
Revenue provided the forum with a useful presentation titled “VHT – the 6 steps”. Taxpayers can pay their VHT liability by debit/credit card, monthly direct debit or annual debit instruction (ADI). Payment by ADI will be deducted on 21 March 2024.
Commercial Credit Card payments
In consideration of the high processing costs of commercial credit cards, Revenue informed the group that it intends to no longer provide an option for payment by commercial credit card.
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