Revenue has updated the guidelines for charging interest on late payment through Revenue Debt Management Services. The manual now includes relevant details for capital acquisitions tax. The purpose of the guidance is to explain why interest is charged and how interest charges are raised and charged from the Debt Management Services. The title of the guidelines has also been updated and references to charging interest on fixed direct debit and balloon payments have been removed. Appendix 4, which provides details of the due dates for self-assessed taxes, has been updated to reflect current practices. 

In Irish news this week, the Department of Finance has published its first Annual Progress Report and Revenue has published new guidance on the participation exemption for certain foreign dividends. In UK news, the Institute recommends that the introduction of any UK wide e-invoicing policy should commence on voluntary basis and HMRC is no longer providing unique taxpayer references (UTRs) to taxpayers or agents over the phone. In International news, two EU Parliament subcommittees will host a joint public hearing next week on the impact of tax policies on the EU housing crisis. Ireland 1. Read about the Annual Progress Report recently issued by the Department of Finance and the Department of Public Expenditure and Reform. 2. Revenue has issued new guidance on the dividend participation exemption. UK 3. The Institute responded last week to the consultation by the UK Government  on e-invoicing, outlining the recommendation that any e-invoicing policy should commence on voluntary basis. 4. HMRC is no longer providing unique taxpayer references (UTRs) to taxpayers or agents over the phone for security reasons. International 5. Read about the upcoming public hearing on the impact of tax policies on the housing crisis in the EU. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s post EU exit corner here.  

Revenue has updated its guidance on the computation of Case I and Case II profits or gains of a company. Section 11.8 of the guidance now includes an example of correction of an error where the error has been identified prior to the filing of the tax return.

Revenue has updated its guidance on filing and paying stamp duty on Instruments to include details on amending a return filed on ROS. The guidance on charging and stamping of instruments has also been updated.   The manual on filing and paying stamp duty has been updated to outline the process to be followed when a filed stamp duty return needs to be amended by someone other than the original filer. References to ‘Using ROS offline’ have been removed as the Return Preparation Facility is now the online facility which can be used to prepare stamp duty returns. The guidance on charging and stamping of instruments has been updated to provide additional guidance on the operation of these provisions.

Revenue has updated its guidance in two of its manuals on the operation and administration of Ireland’s Pillar Two legislation. The guidance materials in question are: Part 04A-01-02 – Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union Part 04A-01-01 – Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union - Administration Finance Act 2024 provides that certain of the amendments to Part 4A TCA 1997 shall apply in respect of a fiscal year or an accounting period commencing on or after 31 December 2024. The guidance in Part 04A-01-02 has been updated to confirm that Revenue is prepared to accept the application of these provisions to a fiscal year or an accounting period commencing prior to 31 December 2024. The administrative guidance contained in Part 04A-01-01 has been updated to outline how the Undertaxed Profit Rule (UTPR) and the Qualifying Domestic Top-Up Tax (QDTT) group recovery provisions are applied where a securitisation entity is part of a UTPR and a QDTT group.

The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for April 2025 which confirms an exchequer surplus of €2.8 billion to the end of April. This compares to a deficit of €1.2 billion recorded for the same period last year. Tax receipts collected to the end of April were €28.6 billion, which was €3.8 billion ahead of the same period last year. Excluding the once off receipts from the Court of Justice of the European Union (CJEU) judgement in the Apple State Aid case, total receipts amounted to €26.8 billion, an increase of €2.1 billion from the same period in 2024. Income tax receipts for the month of April were €3.5 billion which was €0.2 billion ahead of April 2024 receipts. On a year-to-date basis, receipts to the end of April of €11.7 billion were up by €0.5 billion (4.8 per cent), when compared to April 2024. As noted in the Fiscal Monitor, April is not a significant month for corporation tax receipts; receipts of €0.1 billion were collected in the month. On a cumulative basis, receipts of €4.9 billion were up by €2.2 billion on the same period last year. When the once-off CJEU receipts are excluded, cumulative corporation tax receipts to April 2025 amounted to €3.2 billion, ahead of the same period last year by €0.5 billion. April is a non-VAT due month and receipts in the month of €0.3 billion were down slightly on the same month last year by €38 million. Cumulative receipts of €7.9 billion were ahead by 6 percent on end-April last year.

Revenue has published new guidance on the participation exemption for certain foreign distributions which was introduced by Finance Act 2024. The participation exemption applies where a relevant subsidiary makes a relevant distribution on or after 1 January 2025 to a parent company of the relevant subsidiary. The conditions which the parent company must satisfy to claim the exemption, including the required qualifying participation in a relevant subsidiary, are detailed in the guidance. The qualification requirements for a relevant subsidiary are also outlined. A qualifying distribution must be recognised as income in the hands of the recipient for the purposes of corporation tax and it must be made out of the profits or the assets of the relevant subsidiary. The exemption is supplemental to the existing “tax plus credit” approach. Companies must elect to claim the exemption with all qualifying distributions, in that accounting period, being exempt if an election is made. A claim for the exemption cannot be made on a per dividend/distribution or per subsidiary basis.

The Department of Finance and the Department of Public Expenditure and Reform have jointly published the Annual Progress Report 2025 which incorporates the Department of Finance’s spring forecast. The report is a European legal requirement which assesses progress on the implementation of the Government’s Medium-Term Fiscal and Structural Plan. It replaces the annual Stability Programme Updates and the annual National Reform Programme in the EU budgetary cycle. The report outlines that Modified Domestic Demand (MDD) is projected to expand by 2.5 percent in 2025 and 2.75 percent next year, both of which are downward revisions compared to the autumn forecasts. The projections are prepared on the assumption that transatlantic tariffs will not be introduced and forecast a general government surplus of €8.7 billion. In an alternative scenario, which incorporates the likely economic impacts of the tariffs that are now in place, projected MDD growth is lowered to just over 2 percent this year and 1.75 percent next year. The report notes that while the economy, in aggregate terms, is undoubtedly in a strong position at present, the near-term outlook for the Irish economy is clouded in considerable uncertainty. Uncertainty in terms of trade policy, financial and commodity market developments, geopolitics and macroeconomic policies are noted as the dominant features of Irish and global economies. Navigating the challenging external environment is identified as a key priority by this Government. Commenting on the publication, Minister for Finance, Paschal Donohoe said: “The more contested and fragmented world that is now taking shape represents a serious headwind for the Irish economy which has benefited so much from the rules-based, multilateral trade system. Given the elevated level of uncertainty, it is important to stress that our assessment published today is more akin to a scenario analysis; my officials will, of course, continue to monitor incoming data and developments and update numbers accordingly.”

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. 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. The latest minutes and slides from the most recent meeting of the HMRC Northern Ireland Joint Customs Consultative Committee, which the Institute participates in, have been published. Miscellaneous guidance updates and publications Data Element 2/3: Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), Data Element 2/3: Document and Other Reference Codes: Licence Types — Imports and Exports of the Customs Declaration Service (CDS), Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service, External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Designated export place (DEP) codes for Data Element 5/23 of the Customs Declaration Service, Check if a business holds Authorised Economic Operator status, Claim back an import security deposit or guarantee, and Apply for Designated Export Place approval.

On 19 May 2025 the European Parliament’s HOUS Committee and FISC Subcommittee will host a joint public hearing on the impact of tax policies on the housing crisis in the EU. The public hearing will explore the link between taxation and affordability and how tax policies can shape access to housing in the EU. It will also consider how tax policies can contribute to rebalancing the housing market.

In this week’s miscellaneous updates, the latest Stakeholder Digest from HMRC confirms that it’s new Permanent Secretary and CEO has taken up his office and the expected reductions in HMRC’s interest rates have been announced after the Bank of England Monetary Policy Committee reduced the base rate last week from 4.5 percent to 4.25 percent. The first changes in four years have been made to HMRC’s CEST (check employment status for tax) tool and HMRC has updated their genuine communication guidance to add information about ongoing research into agent and professional standards which means that some tax agents may receive an email or phone call from HMRC inviting them to participate. The latest newsletter from the Federation of Small Businesses (FSB) says that the ‘taxi tax’ must be stopped and small business employers are invited to take part in FSB’s latest survey on the National Living Wage by 19 May. And finally, the Public Accounts Committee (PAC) has published a report on the cost of the tax system which not surprisingly concludes that the cost of administering taxes is increasing for HMRC and taxpayers. New HMRC Permanent Secretary and CEO After the retirement last month of Sir Jim Harra, John Paul (JP) Marks joined HMRC as its new First Permanent Secretary and Chief Executive. JP has been a civil servant for over two decades and previously served as Permanent Secretary of the Scottish Government for three years. In a You Tube video to mark the occasion, JP introduces himself and sets out his key priorities. CEST updated On 30 April 2025 HMRC updated this tool which is used to find out if a worker on a specific engagement should be classed as employed or self-employed for tax purposes. According to HMRC, CEST has been updated to simplify its language; useful links have also been added. The update also features a  new mutuality of obligation question (the obligation on the employer to provide work and the employee to accept the work) which is often key to many decisions at tax tribunal. HMRC has reaffirmed its ongoing commitment to the tool saying it will stand ‘behind the outcomes of this tool where it has been used correctly.’ Updated guidance is therefore expected to be published on how to answer the questions in the tool which have changed. PAC reports on cost of the tax system The House of Commons PAC report on the cost of the tax system concludes that the cost of administering taxes is increasing for HMRC and taxpayers and as a result calls for HMRC to “publish realistic plans to simplify the tax system and establish robust metrics for reporting the impact on its costs, and on taxpayers’ costs, in its annual reports”. The report also says that taxpayers’ trust in HMRC is falling and recommends that HMRC should work with taxpayers and their representatives to understand why this is the case and what it can do to quickly address the decline. HMRC should publish the concerns it has heard and the actions it is taking to address these, as a first step to improving trust.

The Economic and Financial Affairs Council (ECOFIN) will meet on 13 May 2025. At the meeting, the group will be invited to reach a general approach on the directive on VAT rules for distance sales of imported goods and import VAT. The draft directive seeks to improve the collection of VAT on imported goods by making suppliers liable for the VAT paid on import.