The EU Cross-Border Payment Service Provider reporting requirements (CESOP), which took effect on 1 January 2024, require Payment Service providers (PSPs) to return data on cross-border payments every quarter. Readers are reminded that the second quarterly filing deadline for CESOP filers in Ireland is this Wednesday, 31 July 2024. Further information and guidance is available on Revenue’s CESOP webpage.

Last week, the Institute, under the auspices of the CCAB-I, wrote a letter to the Minister for Finance setting out a range of proposals to address various legacy issues within the Employment Investment Incentive Scheme (EIIS) which have been carried forward from the days of the Business Expansion Scheme (BES). The issues highlighted in the letter are not matters arising from differences in the understanding of tax policy. Rather, the issues identified are areas where the legislation could be updated without impacting the integrity of the relief and without conflicting with the General Block Exemption Regulation (GBER). The proposals will, in our view, provide clarity to taxpayers and advisors, and also simplify the legislation by removing obsolete provisions.  

Last week, the Institute’s Director of Advocacy and Voice, Cróna Clohisey wrote to the Minister for Finance with a proposal to reduce the lower rate of Employers’ PRSI (ER PRSI) for the purposes of assisting businesses manage the cost of introducing pensions’ auto-enrolment. To counteract the cost of auto-enrolment for employers, the letter notes that consideration should be given to reducing the lower rate of Employers’ PRSI (based on the rate that will apply from 1 October 2024) by 1.5%; from 8.9% to 7.4%. This change would impact the group of workers on minimum wage, many of whom depending on individual age and earnings will be required to enrol.

The Tax Strategy Group (TSG) last week published its annual papers in advance of Budget 2025. The TSG is chaired by the Department of Finance and comprises senior officials and advisers from several governmental departments and offices. The TSG is not a decision-making body, rather its purpose is to outline the tax policy considerations for the Government and the options available to it in forming this year’s Budget. In this year’s papers, the TSG notes that the key challenges for Ireland’s economy are ongoing capacity constraints, the aging population, digitalisation, de-carbonisation and de-globalisation. The TSG also highlights the country’s reliance on multinational companies and the vulnerability that this presents for our corporation tax base. The full list of papers released by the TSG are as follows: Income Tax (TSG 24/01) includes a summary of tax yields, information on the distribution and burden of income tax and USC and policy considerations for reform. Other items discussed include tax relief for sporting bodies and philanthropy, the incapacitated child tax credit, income tax property-related measures and pensions. Pay Related Social Insurance (TSG 24/02) examines issues including social transfers, Irish labour market trends, social protection budgets and costings. Corporation Tax (TSG 24/03) examines a range of topics such as corporation tax trends, implementation progress of the OECD BEPS Project (including Pillar One and Pillar Two), EU tax developments, an update on Apple State Aid case and a discussion on various business support measures, including the Research and Development Tax Credit. Enterprise Supports (TSG 24/04) discusses various business tax reliefs, including Reliefs for Investment in Corporate Trades (EII/SCI/SURE) and Innovative Enterprises (Angel Investor), Revised Entrepreneur Relief, Retirement Relief, Share-based Remuneration and accelerated capital allowances. It refers to the report of the TALC Sub-Committee on Simplification and Modernisation of Business Reliefs for SMEs, noting that the Department of Finance will consider some matters of policy that were identified by stakeholders. The Department will also consider administrative proposals that may require legislative amendment. Agri-Taxation Measures (TSG 24/05) looks at the agri-taxation measures available under each tax head. Capital and Savings Taxes and Stamp Duty (TSG 24/06) covers capital gains tax, capital acquisitions tax, DIRT, life assurance exit tax, stamp duty, the Tax Appeals Commission and residential zoned land tax and examines rates, yields and exemptions associated with these taxes. It also provides an update on the Department’s ongoing project to improve the reporting of Tax Expenditures. Value Added Tax (TSG 24/07) reviews VAT rates and structures, provides options for change and looks at VAT developments at EU and domestic level.

In Irish news, a delegation from the Institute recently met the Minister for Finance to discuss CCAB-I's Pre-Budget 2025 submission, Revenue publishes statistics on Local Property Tax and Vacant Homes Tax, and Revenue advises that work is ongoing to resolve issues with the Form 11 income tax return. In UK news today, we look at another tax related appointment in the new Labour government and miscellaneous updates covers a range of changes including the latest Agent Update.  Ireland A delegation from the Institute, under the auspices of the CCAB-I, met the Minister for Finance, Jack Chambers TD to discuss the CCAB-I’s Pre-Budget 2025 submission. Revenue has published statistics on Local Property Tax and Vacant Homes Tax for 2024. Revenue is working to resolve issues with the Form 11 income tax return. UK The new Exchequer Secretary to the Treasury has been appointed as the current parliamentary session is extended to 30 July. Read our miscellaneous updates which covers a range of changes including the latest Agent Update. 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 EU exit corner.  

Following the recent publication of Revenue’s new guidelines for determining employment status for taxation purposes (which applies the new test outlined in Karshan), Revenue has updated the Tax and Duty Manual which provides guidance on the tax treatment of remuneration of Members of State & State Sponsored Committees, Boards, Commissions & other Bodies.  

Revenue has updated the Stamp Duty Manual which provides guidance for the making of Stamp Duty assessments under section 20 SDCA 1999 and for appealing against Stamp Duty assessments under section 21 SDCA 1999. The manual has been updated and refreshed throughout and now includes details of the e-stamping regulations in the context of amending a self-assessment.  

Sections 90 to 102A of the Capital Acquisitions Tax (CAT) Consolidation Act 2003 provide for CAT relief in respect of gifts or inheritances of business assets. Revenue has updated the Tax and Duty Manual which provides guidance on the operation of this relief to reflect changes introduced in Finance (No.2) Act 2023. With effect from I January 2024 the clawback period will commence from the valuation date rather than the date of the gift/inheritance (paragraph 12.7).  

Revenue has updated its guidelines for charging interest on late payment through Revenue Debt Management Systems (DMS) and Fixed Direct Debit Systems . The manual provides guidance on when and how Revenue charges interest and the rates that apply.  

Revenue has updated the Tax & Duty Manual which provides guidance on employer’s PAYE obligations with effect from 1 January 2019.   The updates include:   Removal of content that is published in other manuals   Updated list of applicants who can submit a paper application to register as an employer   Updated contact information for Revenue offices throughout   Details of employer obligations under Enhanced Reporting Requirements   Updated guidance in relation to service charges (tips) paid out by/on behalf of an employer   Updated guidance in relation to annual membership fees paid to a professional body   Notification regarding the eSARP portal available in ROS   Updated examples throughout   Detailed guidance in relation to employer obligations throughout the income tax year  

Revenue is intending to enter into a Data Sharing Agreement under the Data Sharing and Governance Act 2019. A Public Consultation Notice has issued on the proposed Data Sharing Agreement (DSA) which will allow for the sharing of the Unique Business Identifier Number (UBIN) between a number of government offices including Revenue.   The public consultation is available at gov.ie/consultations/DSA and is open from 17 July to 14 August. The public are invited to make submissions by email to consultations.dsa@per.gov.ie.  

As previously reported, Revenue has been working to resolve issues identified with the ROS Form 11. Revenue has notified us that the issue regarding the 3 percent USC surcharge on income over €100,000 has been resolved, along with some minor enhancements.   The issues regarding DIRT on UK deposit interest and pre-population of certain payments received from the Department of Social Protection are due to be released on 29 July. This is because of additional complexities in resolving these problems.  Revenue has confirmed that returns filed that have been impacted by these issues will be reviewed by Revenue, rather than the taxpayer (or their agent) having to revisit each return to make amendments.