Revenue has updated the Return of Qualifying Investments in a Qualifying Company (Form RICT) and Return of Information of an Investment Fund Return (Form IF) to reflect the changes made to the Employment Investment Incentive and related schemes in Finance (No.2) Act 2023. These changes were largely driven by amendments required under the EU General Block Exemption Regulation. The returns are now available in Revenue’s eBrief No. 262/24 in respect of investments made in 2024, with updated instructions and explanatory notes for each.

The Minister for Finance, Jack Chambers TD has published the report of the Funds Sector 2030 review. The Institute, under the auspices of the CCAB-I, responded to the review in September 2023 and we now welcome the report of the review group. The Department of Finance commenced the review to understand the state of the Irish fund sector and the extent to which Ireland’s tax, legal and regulatory framework remains best-in-class. Given the many developments in recent years, the review aims to support the long-term growth in the sector in Ireland, including in the retail investment sector. Concluding that Ireland is well placed to grow in the funds and asset management sector while noting that “what has worked for Ireland in the past will not necessarily work into the future”, the review team has developed a set of recommendations to address the material issues identified in the review. As with any change in legislation and regulation, the Exchequer impact of those changes will need to be carefully considered. So, the phased introduction of these changes is recommended, beginning with changes to the Investment Undertaking Tax regime. One of the recommendations call for the reform of the taxation of Irish-domiciled funds to align with the treatment of equivalent products in EU, EEA and OECD territories. The following proposals are noted in the report: Remove the eight-year deemed disposal requirement, Align the tax rates for Investment Undertaking Tax and Life Assurance Exit Tax with the CGT rate (currently 33 percent), and Allow for a limited form of loss relief. Commenting on today’s publication Minister Chambers said: “The story of the funds industry over the last five years has been one of growth, with 22% growth in direct employment over the last five years, it’s important to recognise where we have been successful. However, it is even more important to understand where we need to move to, to be successful in the future, that was a key task for this Review. The regionalisation of the sector is a key feature of the funds industry here. There are people living in Donegal, Cork, Limerick, Kilkenny and Kerry working in the sector because of firms who have established their Irish operations there. People no longer have to move to Dublin or abroad to pursue a career in the funds sector. And for those who have worked in funds abroad, gaining experience and expertise, Ireland now offers them attractive careers to return to. The fact that the review was commissioned and undertaken is a sign of the importance we see in the funds and asset management sector. The review has had a positive impact, leading to a period of deeper thought, not just on today’s priorities, but the future outlook and how the sector interacts with Government, with regulators and with its customers. I would like to thank everyone who responded to the consultation, including many individual taxpayers, and those who engaged in further discussions with the Review Team subsequently. I would also like to that the Institute of Banking for producing a thorough and engaging history of the sector which I am pleased to publish alongside the Review today.”

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. Miscellaneous guidance updates and publications Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020, Customs, VAT and excise UK transition legislation from 1 January 2021, Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS), Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, Safety and security requirements on imports and exports, Making an entry summary declaration, and Data Element 2/3: Document and Other Reference Codes: Licence Types — Imports and Exports of the Customs Declaration Service (CDS).

In this week’s miscellaneous updates, we bring you news of a new form which should be used in the event of insolvency where a business pays plastic packaging tax and needs to deregister, and regulations have been laid to introduce the Independent Film Tax Credit. HMRC has also published a new Creative Industries Expenditure Credit Manual and guidance has been published on how public bodies can get technical advice and support from HMRC. The plastic packaging tax and insolvency scenarios HMRC has introduced a new digital form which businesses must use to: notify HMRC of an insolvency event, submit plastic packaging tax returns, and deregister from this tax. Independent Film Tax Credit Earlier this month on 9 October, regulations were laid to implement the new Independent Film Tax Credit (IFTC). This was announced by the previous government in the March 2024 Budget and will provide an uplift of 19 percent to the existing Audio-Visual Expenditure Credit. It is specifically targeted at low-budget British films with a budget of up to £15 million but will be tapered for those with a budget of up to £23.5 million. Companies will be able to apply to HMRC to claim the IFTC from 1 April 2025 if principal photography began on or after 1 April 2024. Certification applications for the enhanced uplift commence from tomorrow, 30 October 2024. Support with tax for public bodies HMRC has published guidance on how public bodies, such as the NHS, housing associations, local authorities, etc. can get technical advice and support from HMRC.

There are just two days to the 31 October 2024 self-assessment paper filing deadline for 2023/24 in order to avoid penalties. Readers are reminded that if an online self-assessment return cannot be filed by virtue of one of the online filing exclusions or special cases (search GOV.UK for details as these regularly change) meaning the return must be filed on paper instead, then in those cases, the 2023/24 paper filing deadline is extended to 31 January 2025. A reasonable excuse claim should accompany such returns.

Tomorrow sees Chancellor of the Exchequer Rachel Reeves deliver the first Labour Party Budget in nearly fifteen years. The Institute’s Tax Team will be analysing the Budget’s tax announcements and a newsletter reporting on key areas will issue to members. Detailed analysis will follow in Chartered Accountants Tax News next Monday 4 November and in subsequent weeks. 

In Irish news today, the Institute, under the auspices of the CCAB-I attended the recent meeting of the Department of Finance Business Tax Stakeholder Forum and Revenue has amended the guidance on Relief for Investment in Corporate Trades to reflect revisions arising from the General Block Exemption Regulation and Finance (No.2) Act 2023. In UK news, ahead of next week’s Budget the Institute has written to the Exchequer Secretary to the Treasury on a range of tax policy and tax administration areas and this week’s miscellaneous updates features updated guidance on VAT on private school fees. In International news, the OECD has published a manual on Effective Mutual Agreement Procedures. Ireland The Institute, under the auspices of the CCAB-I, attended the recent meeting of the Department of Finance Business Tax Stakeholder Forum. Revenue has amended the guidance on Relief for Investment in Corporate Trades to reflect revisions arising from the General Block Exemption Regulation and Finance (No.2) Act 2023. UK Ahead of next week’s Budget the Institute has written to the Exchequer Secretary to the Treasury on a range of tax policy and tax administration areas. This week’s miscellaneous updates features updated guidance on VAT on private school fees. International The OECD has published a manual on Effective Mutual Agreement Procedures. 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.

The OECD has published an online Manual on Effective Mutual Agreement Procedures (MEMAP) as part of a broader project to improve the functioning of existing international tax dispute procedures and to develop supplementary dispute resolution mechanisms. MEMAP is intended as a guide to increase awareness of the Mutual Agreement Procedure (MAP) process and how it should function. It will provide tax administrations and taxpayers with basic information on the operation of MAP and identify best practices for MAP without imposing a set of binding rules upon member countries.

Revenue has updated the Tax and Duty Manual which provides guidance on the submission of iXBRL financial statements as part of corporation tax returns. The manual has been updated to confirm that companies liable to corporation tax whose affairs are managed in either the Large Corporates Division (LCD) or the High Wealth and Financial Services Division (HWFSD) are obliged to file their financial statements in iXBRL format (Paragraph 2.1).  Following the creation of the HWFSD, changes to the most recent Form CT1 where explicit references were made to the LCD have been removed (Paragraph 3).  Guidance on what should be included in the mandatory ‘DPLTurnoverRevenue’ and ‘DPLGrossProfitLoss’ tags following the introduction of a new section of the EU IFRS taxonomy for insurance/reinsurance and life assurance entities reporting under IFRS 17 (Insurance Contracts)( Paragraph 3.1.3) is included.  Further updates include:  updated examples to reflect more recent accounting standards and related taxonomies (Paragraph 1.6.1),  Small Company turnover and balance sheet thresholds under the Companies Act 2014 (Paragraph 3.1.1), and  New guidance on the inappropriate use of taxonomies (Paragraph 4.1.2).  For further information see eBrief No.255/24. 

Revenue has updated Tax and Duty Manual which provides guidance on the Relief for Investments in Corporate Trades (RICT). The manual has been updated to reflect the revision of Regulation (EU) No 651/2014, known as the State Aid General Block Exemption Regulation and the amendments made to Part 16 TCA by Finance (No.2) Act 2023 to the Employment Investment Incentive, Start-Up Relief for Entrepreneurs and Start-Up Capital Incentive schemes available under Part 16 TCA 1997.  The main updates include:  the insertion of a new section on investments from 1 January 2024 (section 2.6),  the insertion of a new section on Rate of Relief (section 4.4.1) and a new section on the calculation of the deduction from income for investments made from 1 January 2024 (section 4.4.2),  Section 7.1 in respect of eligible shares issued on or after 1 January 2024,  Section 8.2.1 in relation to the age of the RICT group,  Sections 9.2, 9.3 and 9.4 in relation to initial, follow-on, and expansion risk finance investment, and  Section 10 to reflect the limit on the amount that can be raised under Part 16 that applies from 1 January 2024. 

Revenue has updated the Tax and Duty Manual which provides guidance on the Revenue Online Service (ROS). The manual has been updated regarding security questions for the ‘Reset ROS Login’ process.  In addition, the reset option on the ROS home page has been moved and changed to ‘Trouble Logging In?’, while the ‘system password’ has been retitled ‘verification code’ in existing ROS registration screens as well as communications, e.g. SMS from the registration process.  The ROS Reset option in myAccount has also been updated to enable customers to receive a verification code without answering security questions.   Further information is available in eBrief No. 257/24. 

In a letter to the Exchequer Secretary to the Treasury, the Institute took the opportunity to highlight a range of tax policy and tax administration recommendations and concerns ahead of next week’s Budget and the 2025 Spending Review. From business taxes to the need to invest in HMRC, the Institute also advocates for a lower rate of corporation tax for Northern Ireland.  The full range of areas covered in the letter are as follows: Business taxation and the need for stability, certainty, and supports for investment, How tax policy can support the transition to net zero, The fuel duty dilemma, The Trader Support Service and the customs intermediaries’ market in Northern Ireland, Potential Budget Day announcements on capital taxes, Investment in HMRC, Making Tax Digital for income tax, Tax simplification and policy making, and A lower rate of corporation tax for Northern Ireland.