The Stamp duty manual on associated companies relief has been amended to clarify certain conditions for the relief and certain Revenue practices.  Amendments in the Associated companies relief (section 79 Stamp Duties Consolidation Act 1999) manual relate to: Retention of property within a corporate group post transfer – the type of property that, by its nature, ceases to exist, and the extinguishing of shares in a transferred company following its liquidation. The application of practices to both the transferee and transferor. The holding of issued share capital of foreign bodies corporate. Change in ownership of shares in listed companies post transfer. Timing of transfers of property and series of mergers. Liquidation and mergers under foreign law.

Revenue have updated their tax and duty manual on PAYE systems for non-Irish employments exercised in the state. The tax and duty manual Part 42-04-65 – PAYE system – employee payroll tax deductions in relation to non-Irish employments exercised in the state, has been updated to: Reflect changes on the simplification of requirements in the application for a dispensation from operating PAYE, with effect from 1 January 2020. Applications are only required annually where temporary assignees spend more than 60 days in the State. Detail Revenue’s interpretation of Article 15(2) of the OECD Model Convention on Income and Capital. Chapter 8, on bonuses in non-Irish employments, has also been updated.

Revenue have updated the manual on the appointment of an independent expert to assist in R&D audit. The tax and duty manual, R&D credit: Appointment of expert to assist in audits, has been updated at Appendix V (Template e-Tender document).

Corporation tax return reminder letters will issue to companies who have not filed a Form CT1 due on 23 March. The letters will issue the week beginning 6th July.   The sample letter provided to Chartered Accountants Ireland does not refer to late filing surcharges as the imposition of surcharges continues to be relaxed due to COVID-19. Tax returns can be based on “best estimates” and iXBRL accounts do not have to be submitted at the same time as the Form CT1. The debt warehousing scheme can be accessed only when all outstanding tax returns are submitted.   

Versions 5 of the FAQ, Guidance for PAYE Employees whose Employers have been affected by the COVID-19 Pandemic and are availing of the TWS, was released by Revenue on 24 June 2020 to reflect new updates and clarifications. Updated items include: How long will TWSS payments last – Confirmation of the extension of the scheme to 31 August. (Paragraph 1) How do I know if my employer is claiming the TWSS – Subsidy payments made to date are visible to each employee in myAccount on ROS. (Paragraph 13) Week 1 basis – Revenue will place all employees receiving the Temporary Wage Subsidy (TWS) or the pandemic unemployment payment (PUP) on the Week 1 basis, to attempt to mitigate the impact of the employee receiving untax income throughout the year. Notification to operate the Week 1 basis was sent to employer’s ROS inbox on 21 June. Further details on the Week 1 basis have also been included. (Paragraph 19) Eligibility of apprentices returning from training – Revenue will retrospectively apply the TWSS for apprentices returning to work from training programmes run by SOLAS, who were not on their employer’s payroll in February 2020. (Paragraph 24) Further details on these updates and additional information are highlighted in grey in Revenue’s TWSS FAQs for employees.

Guidance on the online CG50 application processing system has been released by Revenue. Revenue published a new tax and duty manual – eCG50: Guide for applicants – which provides guidance on the online processing system now available for CG50 applications. The new system allows online filing by: vendors, applying for an eCG50 certificate, and purchasers filing an eCG50B form. The online processes are expected to improve turnaround times for applicants.

Versions 16 of the FAQ, Guidance on the Operational phase of the COVID 19: Temporary Wage Subsidy Scheme (TWSS) was released by Revenue on 24 June 2020 to reflect new updates and clarifications. Updated items include: Conditions associated with the TWSS – The eligibility criteria to continue participating or to join the scheme after Q2 remains unchanged. (Paragraph 2.4) Rehiring employees – Instruct employees to use myAccount to transfer tax credits to active eligible employment ID, where not already associated. This must be done at least 2 working days before the employer requests the latest Revenue payroll notification (RPN). Employers are encouraged to place rehired employees on a weekly pay frequency to align the pay weeks with the TWSS payments and prevent pandemic unemployment payment (PUP) overlaps. Where this is not practical employers are advised to retain the excess weeks subsidy refund, which will be collected in the reconciliation process. (Paragraph 2.8) How to stop operating the scheme – Employers will have clarity on whether they met the eligibility criteria at the end of Q2. Employers must immediately cease claiming the TWS where they subsequently realise the eligibility criteria has not been met. No clawback of claims to that date will arise where evidence of assumptions supporting the original self-assessment of eligibility can be shown. (Paragraph 2.13) Taxation of the wage subsidy in the hands of the employee – Employees who have received the TWS or PUP have been placed on a ‘non-cumulative’ Week 1 basis. Updated RPNs are be available in ROS since 21 June. To ensure employees are correctly switched to the Week 1 basis employers need to use the most up to date RPN. (Paragraph 3.11) Inclusion of apprentices – Revenue have implemented changes in the TWSS to accommodate apprentices returning to work following education or training programmes with SOLAS. (Paragraph 3.16) Details to enter when running payroll – Where an employer wants to pay an employee receiving the TWS for multiple pay periods (e.g., two weeks holidays); individual payroll periods need to be reported and paid with different pay dates, otherwise tapering could arise. (Paragraph 4.18) Information available to employees – Details of the TWS reported to Revenue by the employer can be seen in the employee’s Revenue record on myAccount. Where discrepancies are arising, employees are encouraged to contact their employer to address the matter. Following this, employees are encouraged to contact Revenue where the discrepancies have not been addressed. (Paragraph 7.3) Operation of scheme compliance – Compliance checks will be conducted for all employers availing of the scheme, through a letter issued to them via myEnquiries. Employers are encouraged to respond promptly to avoid a suspension in future payments. (Paragraph 7.4) Further details on these updates and additional information are highlighted in grey in Revenue’s FAQs.

Revenue recently commenced a compliance programme for all employers availing of the Temporary Wage Subsidy Scheme (TWSS).  This is not a Revenue audit programme. The programme is set to operate over several months with letters issuing in tranches to employers and tax agents via ROS/MyEnquiries.  The letter will be titled “COVID-19: Employer COVID-19 Compliance” in the Enquiries Record. The letter requests summaries and documentary evidence to establish that: employers participating in the scheme meet the eligibility criteria employees are receiving the correct amount of subsidy, and the subsidy amount is being correctly identified in employee payslips. Revenue may also look for any late PAYE and VAT returns to be submitted. The employer has five days to respond to Revenue’s letter.  Chartered Accountants Ireland under the auspices of the CCAB-I raised concerns about the timing and extent of this compliance check at a recent TALC meeting and we issued a press release to publicly voice our concerns. Further details and information can be found in Revenue eBrief No. 117/20.

Revenue confirmed the extension of the DAC6 reporting deadline on foot of an EU Directive. An EU Directive, which came into force on 27 June, has given Member States the option to extend the DAC6 reporting deadline by 6 months. Revenue have confirmed that its DAC6 filing portal is now scheduled to open on 1 January 2021. The extended deadline dates are as follows: 31 January 2021 – Mainstream reporting, 28 February 2021 – Lookback reporting period, and 30 April 2021 - Periodic report on marketable arrangements. Further details can be found on Revenue’s Covid Hub, under exchange of information.

The OECD has published a tax working-paper, Carbon pricing design; effectiveness, efficiency, and feasibility; an investment perspective. The paper considers how the design of carbon pricing instruments affects their effectiveness, efficiency and feasibility. The paper discusses how volatile carbon prices can cause risk-averse investors to forego clean investment that they would have undertaken with more stable prices. It also evaluates the effectiveness and efficiency of policy instruments to stabilise carbon prices in Emission Trading Systems. 

Kazakhstan has deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) which will enter into force on 1 October 2020. For more information read the OECD’s update.   

Last week, the Council of the European Union amended the Directive on Administrative Cooperation (DAC) 6. The amendment allows for Member States to extend the DAC 6 filing deadlines by six months. The Irish Revenue has confirmed that Ireland will be extending its deadline (see the Irish tax section of this newsletter).   Member States will now have three additional months to exchange information on the financial accounts of beneficiaries who are tax residents in another Member State and will have six additional months to exchange information on certain cross-border tax planning arrangements.    For more information read the European Commission’s update.