Daniel O’Donovan considers the urgent need to resolve interpretative questions that have emerged following the transposition of the Corporate Sustainability Reporting Directive into Irish law The European Union (Corporate Sustainability Reporting) Regulations 2024 (the Regulations), also known as S.I. No. 336 of 2024, transposes the Corporate Sustainability Reporting Directive (CSRD) into Irish law.  This legislation marks a significant step in aligning Ireland’s corporate reporting framework with the EU’s broader sustainability goals, as outlined in the European Green Deal and the EU Action Plan for Financing Sustainable Growth. The Regulations were signed into law during the summer and came into effect on 6 July 2024. Their principal objective is to integrate the new corporate sustainability reporting obligations with Ireland’s existing financial reporting framework.  It is estimated that about 1,000 Irish companies will fall into the scope of these Regulations. The Regulations will be phased in over the next few years and will generally apply to public interest entities and companies qualifying as large under section 280H of Companies Act 2014.  Companies regulated by the Central Bank of Ireland qualify as large under this section, for example. It is welcome to see the implementing legislation. Ireland is among the first countries in the European Union to have implemented the CSRD, thus giving businesses in Ireland as much time as possible in the circumstances to assess its impact.   The impacted entities have been assessing the obligations in the legislation since it came into effect.  As with any implementation of such a complex European directive, some interpretative questions in relation to the implementing legislation have emerged. What follows are some of the key interpretative questions that have emerged to date. The definition of “Applicable Company” Several questions arise from the definition of “applicable company” in Section 1586 of the Regulations.  The definition refers to a provision contained in Part 6 of Companies Act 2014 to define its boundaries and, in particular, draws on the definition of a large company in section 280H of the Companies Act 2014.  This appears to have unintended consequences because an ineligible entity is a large company.  For example, certain small and medium entities and micro-entities that fall within the definition of an ineligible entity may be included in year two of reporting pursuant to section 1587(1)(b), reporting on 2025 sustainability information, rather than being in year three of reporting pursuant to section 1587(1)(c), reporting on 2026 sustainability information.  Exemptions for certain subsidiaries Section 1594 of the Regulations provides an exemption for certain subsidiaries. However, the exemption appears to be more restrictive than the equivalent in the CSRD, because it appears to be limited to Irish subsidiaries of Irish holding companies and excludes Irish subsidiaries of EU holding companies. See first table below.  In addition, it appears that all subsidiaries that are themselves large public-interest entities (listed and non-listed entities) are precluded from taking the exemption – whereas the CSRD only excludes large subsidiaries listed on an EU-regulated market. Exemptions for certain holding companies that are subsidiaries Section 1598 of the Regulations provides an exemption for holding companies that are themselves subsidiaries, where: a higher parent undertaking prepares a directors’ report under Part 6; or  a non-EU higher parent provides a group report either in accordance with the sustainability standards or in a manner recognised as equivalent to them.  However, as “third country” in the Regulations is defined to exclude Member States, it appears that there is no exemption for holding companies that are subsidiaries of an EU parent. See second table below.  Further, this exemption appears to be restricted further than the CSRD, because all large public-interest entities are prohibited from availing of the exemption, whereas the CSRD only excludes large public-interest entities that are listed on an EU-regulated market. Transitional provisions for consolidated reporting The Regulations permits, in section 1607, a subsidiarity of a third country undertaking to report on a consolidated basis on behalf of a group until 2030 (artificial consolidation).  However, it appears that this provision only applies to financial years commencing on or after 1 January 2028 by virtue of its placement in Chapter 3 of the Regulations.  As such, companies that wish to avail of this provision may be unable to do so during a significant portion of the transitional period. Supporting sustainability ambitions The EU and Ireland’s shared ambition to lead in sustainability reporting, transitioning to a sustainable economy and economic model, it comes with an ambitious timeline.  For example, the period between the effective date of the Regulations and the end of the first period on which year one companies will report on sustainability, in accordance with the European Sustainability Reporting Standards, is just six months.  We believe that a stable and clear legal framework is essential for businesses to thrive in Ireland.  Ensuring that outstanding CSRD transposition matters are resolved promptly will help maintain Ireland’s strong reputation as an excellent place to do business.  It is in the public interest to provide companies with the clarity they need to comply with new laws effectively. We welcome The European Union (Corporate Sustainability Reporting)(No.2) Regulations 2024 (S.I. No. 498 of 2024) signed into law on 1 October. S.I. 498 of 2024 resolves some of the interpretative questions set out above, aligning: The exemption for subsidiaries that are themselves large public-interest entities with the CSRD, which only excludes large subsidiaries listed on an EU-regulated market from the exemption; The exemption for holding companies that are subsidiaries, with the CSRD, which only excludes large public-interest entities listed on an EU-regulated market from the exemption; and The commencement of the transitional provision regarding artificial consolidation with the CSRD, now available immediately. Significant questions remain to be resolved, however.  Accountants are committed to meeting the new sustainability reporting requirements, but we recognise that implementing the CSRD into Irish law is complex and that the necessary resources and expertise to prepare detailed and complex reports, and to obtain assurance on those reports, are still developing in the Irish market. By working together, we can ensure businesses have the support they need to meet these sustainability ambitions, aligning with the CSRD’s goals for 2024 and beyond. Time is running short. As the clock strikes the 11th hour, companies need to have clarity on the interpretative questions discussed in this article as a matter of urgency. Continued imminent engagement between the legislators and the legislates is critical to resolving these matters and ensuring our sustainability reporting ambitions are successfully achieved. Daniel O’Donovan is a Partner with KPMG and leads the firm’s Audit and Assurance Methodology Team

In Irish news, Finance Bill 2024, which implements the tax changes announced on Budget day, was published yesterday. We will provide our analysis in Tax News on Monday. In the UK, HMRC has changed the services it provides to agents calling the Agent Dedicated Line and further draft guidance on the Pillar Two multinational top-up and domestic top-up taxes has been published for comment. In International news, the EU and Norway have signed an agreement to strengthen administrative cooperation, combating fraud and recovery of claims for VAT purposes.  Ireland  1. The Department of Finance have published Finance Bill 2024.  2. The Minister for Social Protection, Heather Humphreys TD, has announced that the pension auto-enrolment scheme will begin on 30 September 2025.  UK  3. Read about the changes which took effect from Monday 7 October for the services that HMRC provides to agents via the Agent Dedicated Line.  4. Further draft guidance on the Pillar Two multinational top-up and domestic top-up taxes has been published.  International  5. The EU and Norway have signed an agreement to strengthen administrative cooperation, combating fraud and recovery of claims for VAT purposes.  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.     

Accountants have a critical role to play in assisting companies, both large and small, to get on their sustainability journey, writes Dee Moran Sustainability reporting is a term that is getting much more traction and interest than in the past and with due cause. From an environmental perspective, the latest report from the Environmental Protection Agency is encouraging in that Ireland’s emissions in 2023 were below the 1990 baseline for the first time in three decades.  However, the report also states that the Climate Act objective of achieving a 51 percent reduction by 2030 will not be achieved unless all sectors meet their indicative reductions.  Therefore, it is critical that we, as accountants, play our part in assisting entities to up their game, particularly in the area of sustainability reporting.  It has become clear in the past year or so that our members’ interest in this area has increased hugely.  Having over 600 members attend our two recent sustainability webinars is testament to this, as are the numbers signing up to the Institute’s certificate and diploma programmes in this area.  The transposition of the Corporate Sustainability Reporting Directive (CSRD) into Irish law on 5 July 2024 requires companies, depending on their size, to begin reporting from 1 January 2024.  Whilst the subsequent publication of the statutory instrument, (S.I. 336/2024) has been very welcome, there remain some areas that require clarification on interpretation before we can begin to write technical guidance for members.  In this special report, Daniel O’Donovan outlines these interpretations in a very clear and concise manner.  We have engaged with the Department of Enterprise, Trade and Employment and Minister Peter Burke, TD, FCA, on these interpretive questions, and other matters that require clarification. An amending statutory instrument, S.I. 498/2024, was signed into Irish law on 1 October 2024. While the S.I. provides some clarifications, outlined in Daniel O’Donovan’s article, there still remain questions that must be answered regarding the transposition. It is important that there is a shared understanding of the legislation, which will allow preparers to set up the processes and procedures necessary to report and comply with the CSRD.  In this special report, EY’s David Connolly and Alba Boshnjaku outline some of the requirements of the CSRD, and why ignoring sustainability is no longer an option for businesses.  They also discuss the importance of an entity having the right mindset, and that companies complying with the CSRD could see real business benefits and additional opportunities.  While approximately 1,000 companies in Ireland will eventually have to comply with the CSRD, there are thousands of other entities that will have to prepare to report on their sustainability information if they are in the value chain of an in-scope company.  This will place an additional burden on SMEs and a recent study undertaken by Niamh Brennan and Sean O’Reilly from UCD, and Louise Gorman from Trinity College Dublin outlines some of these challenges, and how accountants can assist them in managing the impact. A brief explanation of the research is outlined in their article. As accountants, we have a critical role to play in assisting companies, both large and small, to get on their sustainability journey.  We encourage you to upskill and be prepared to play a role in this journey.   Dee Moran is Professional Accountancy Lead at Chartered Accountants Ireland

EU Commission President Ursula von der Leyen will need to summon all her powers of persuasion if she is to deliver on her second term priority to improve EU competitiveness, writes Judy Dempsey Ursula von der Leyen is no pushover. During her first term as head of the EU Commission, the bloc’s powerful executive, she has focused on competition, trade, energy, data protection and climate change, stamping her own indelible mark on the job.  She has been hands-on. Colleagues who have worked with her note her need for control. Delegating has not been von der Leyen’s métier – nor communication, aside from her passionate support for Ukraine.  Her second term is not going to be easy. Yes, von der Leyen has commissioners on board who are aligned with her own conservative political leaning. Yes, she has a few, very experienced commissioners who served under her first term, if not before. And yes, she has her agenda – competitiveness – as her main focus. The number of newly appointed commissioners alone shows how determined von der Leyen is to bolster EU competitiveness in response to shifting global demands, including the rise of artificial intelligence.  Her second term will not be plain sailing, however – for three reasons.  First, many of her 27 commissioners have overlapping dossiers. This will inevitably lead to turf battles. Continued collegiality is not a given.  Second, the EU is obsessed with regulation. Its bureaucratic and regulatory processes often stifle innovation, and this will continue to be the case. Third is the role of EU member states. In recent years, with a few big exceptions, von der Leyen has dealt with countries that prefer to use the EU Council representing member states for their own agenda and interests. This is bad news for von der Leyen. France, and particularly Germany, have increasingly pushed their national interests before that of Europe. It has always been so, but France and Germany, the historic engine of EU integration, are no longer in sync.  French President Emmanual Macron – now a beleaguered leader who only recently formed a government after months of stalemate – wields little influence in the EU.  Macron’s big ideas about making Europe ready to take care of its own security and defence, and his warnings about the need to defend the essential values that make Europe what is today, have had so little traction. This is no thanks to Germany, where Chancellor Olaf Scholz has failed to engage intellectually with either France or the EU.  Scholz’s policies on immigration (border controls on Schengen countries), more monetary integration (blocking a banking union) and more political integration (blocking treaty change to get rid of some veto powers of the member states), point to a squabbling coalition of Social Democrats, pro-business Free Democrats and Greens, all holding up European integration.  They also confirm a German leader reluctant to embrace bigger-picture thinking for Europe’s future. EU member states opposing greater integration can hide behind Berlin. This is why Germany’s political and economic clout used to matter, and for the right reasons. It is different now – to the detriment of the EU and von der Leyen’s goals. Judy Dempsey is Non-resident Senior Fellow at Carnegie Europe *Disclaimer: The views expressed in this column published in the October/November 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor.

As the Strategic Banking Corporation of Ireland celebrates its 10th anniversary, Chief Executive June Butler, FCA, tells us about its evolution and the outlook for SMEs today The Strategic Banking Corporation of Ireland (SBCI) was established in 2014 following Ireland’s exit from the EU-IMF programme, which was initiated to support the Irish economy due to the onset of the global financial crisis in 2008. Launched formally on 31 October 2014 by the Department of Finance and the National Treasury Management Agency, the aim of the SBCI at the outset was to ensure businesses could access funding where the private sector could not provide it. Today, the SBCI aims to help Ireland’s SMEs continue to grow, innovate and prosper. June Butler, FCA, was appointed Chief Executive of the SBCI in September 2021.  Tell us about the SBCI, what it does and how it has evolved over the last decade?  Starting out in 2014, the purpose of the SBCI was three-fold: to make access to finance easier for SMEs; bring down the cost of borrowing; and increase competition in the market, giving businesses more finance options. We have really evolved from our initial start-up phase as a provider of low-cost funding to On-Lending Partners to become a promoter and distributor of risk-sharing lending products that meet SMEs’ current financing needs. One of our key strengths is our ability to act as a conduit for EU-wide supports and bring them to the Irish market for the benefit of SMEs here. We have been successful in promoting competition in the SME financing market, by supporting new entrants and helping non-bank lenders diversify their product offering. We now have close to 40 On-Lending Partners, ranging in size from the main banks to smaller providers and Credit Unions. We provide our partners with low-cost funding and, because we can access lower-cost funding from a variety of sources, we can pass this benefit on to them, and they can then pass it onto their SME clients by way of reduced interest rates. Since the SBCI was first established in 2014, we have channelled more than €4 billion in low-cost flexible funding to over 60,000 SMEs in Ireland. You also offer risk-sharing guarantee schemes – how do they work in practical terms? Our business model has expanded from purely providing low-cost liquidity and wholesale funding at the outset to now offering risk-sharing schemes.  We do this in partnership with Government departments, which also provide funding for these schemes, alongside the banks, non-banks and Credit Unions that distribute them.  We have introduced several risk-sharing guarantee schemes, whereby we share the credit risk with the lender. The key benefit here is the availability of lower-cost and longer-term loans for businesses.  Our risk-sharing schemes also reduce the need for security for businesses, which helps more of them access loans because it reduces a “blocker” they might otherwise have faced when seeking finance. We access counter-guarantees from either the European Investment Bank (EIB) or the European Investment Fund. We structure this into a guarantee-type product whereby we provide an 80 percent guarantee to both bank and non-bank lenders. This means they can then provide better funding access to SMEs. Can you tell us about some of the loan schemes you have launched in recent years? In more recent years, I think we have been instrumental in responding to various crises that have limited the availability of credit to businesses in Ireland. Where there is uncertainty, the availability of credit tends to tighten up and our role here is counter-cyclical: we step in to provide guarantee schemes to make sure that credit continues to flow to businesses. We launched the Brexit Loan Scheme in March 2018, for example, in partnership with the Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine. It was a €300 million scheme aimed at helping SMEs implement necessary changes to address the challenges posed by Brexit. We offered an 80 percent guarantee and that scheme was supported by the InnovFin SME Guarantee Facility, with financial backing from the EU under Horizon 2020 Financial Instruments. We launched the Ukraine Credit Guarantee Scheme in January 2023 – again, in partnership with the Department of Enterprise, Trade and Employment and the Department of Agriculture, Food and the Marine. That scheme facilitated the provision of working capital and medium-term investment finance to businesses adversely affected by the conflict in Ukraine, facing supply chain disruptions and increased input costs. Other examples include the Covid-19 Working Capital Loan Scheme, launched in March 2020, and our Covid-19 Credit Guarantee Scheme, which offered an 80 percent guarantee to participating lenders for SME loans. If you look back to the pandemic and its impact on everyone, including SMEs, there was so much uncertainty in the economy at that time.  Many businesses had to close their doors, but they still needed working capital. There were businesses that spotted opportunities to expand or take advantage of opportunities that arose. That is where we were able to step in with a State-backed guarantee scheme.  The reactive aspect of our role in supporting SMEs and the wider economy is very important. When there is a crisis, and the flow of credit slows, we can step in, make sure the flow of business funding continues, and encourage lenders to provide it. We also take a more strategic view of gaps in the market. Our Growth and Sustainability Loan Scheme, for example, supports SMEs, including farmers and fishers, investing in growth, resilience and climate action. It has been designed to encourage longer-term strategic investment. The SBCI has more recently moved into consumer lending. Can you tell us more about this? Just this year, we have evolved into providing a consumer lending product for the first time, launching a new low-cost Home Energy Upgrade Loan Scheme. The €500 million scheme is designed to help homeowners invest in energy efficiency.  They can borrow between €5,000 and €75,000 on an unsecured basis for a term of up to 10 years, availing of interest rates significantly lower than those available elsewhere in the market. We worked with the Department of the Environment, Climate and Communications on this scheme, which is underpinned by a loan guarantee from the EIB Group and a Government-funded interest rate subsidy. It is the first scheme of its kind for both Ireland and the EIB Group.  Our aim here is to address a gap in the consumer lending market and help promote Ireland’s energy transition by providing low-cost finance for homeowners who want to retrofit their properties to help with both energy efficiency and decarbonisation.  We have also just launched a new Green Transition Finance product for Irish businesses in partnership with Business Venture Partners. It is a €50 million debt fund to support Irish businesses investing in sustainable and green projects and assets, as well as those already operating in a sustainable manner. The loans on offer under this scheme range from €500,000 to €5 million for terms up to 10 years, with competitive interest rates and flexible repayment terms. What is your take on the outlook for SMEs in Ireland today, 10 years after the SBCI was launched?  It is a tale of two halves. On one side, there are a lot of opportunities out there for businesses to explore right now in areas such as digital transformation. Lots of businesses came a long way on this front during the pandemic, when we were working remotely and connecting and doing business online. During that period, we saw investment in things like e-commerce platforms and digital marketing, but there is still quite a way to go.  Digital tools and technologies can really help businesses with customer engagement and efficiency through investment in automated manufacturing and back-office functions, for example.  The second opportunity I would highlight for SMEs relates to sustainability. We are seeing that the SMEs investing in sustainability – be it solar panels, heat pumps or retrofitting their offices – are absolutely reducing costs. This kind of investment has a direct impact on the bottom line, and it is attractive to consumers who are increasingly prioritising green credentials when they choose products and services. The third opportunity for SMEs lies in export markets. We are seeing a lot of smaller businesses looking to identify new revenue streams and they often lie in markets outside Ireland. On the flipside, SMEs in 2024 are facing the challenges of labour market pressures, rising input costs and inflation. All these factors create pressure. The banking landscape has change significantly in the past five years, with the exit of KBC and Ulster Bank from the Irish market impacting the availability of finance.  We have worked hard to establish partnerships with more non-bank finance providers, such as Finance Ireland, Fexco and Linked Finance, so SMEs can have more access to alternative finance options. We are also focusing on Credit Union partnerships. Credit Unions have a national footprint, they are known and trusted in their local communities, and they are now developing into providers of SME finance, which we welcome. The need to focus on attracting new finance entrants, and helping existing players expand their product offering, is important to us at the SBCI.  Talk us through your own career path as a Chartered Accountant prior to taking up your current role with the SBCI. I studied law at Trinity College Dublin and, after that, trained as a Chartered Accountant with PwC. When I left practice in 2003, I joined Bank of Ireland. I started in the Group Internal Audit division and then spent many years in finance in a variety of roles. My last role with Bank of Ireland was in the Business Banking division and it was at that stage that I really developed a passion for working with Irish businesses.  I got to know them. I got to see how driven and innovative they are, so I was honoured when the board of the SBCI selected me for this role, which is also focused on serving Irish businesses, just from a different angle. What do you enjoy most about your role as Chief Executive of the SBCI? I really enjoy working with Irish businesses and feeling like we are genuinely making a difference, because our role is to fill the finance gaps for SMEs and make it easier for businesses to access funding for a whole range of reasons, be it working capital or finance for expansion or exporting into new markets. Every day, we see the benefit of what we are doing. We often hear that SMEs are the lifeblood of the Irish economy, and they really are. They provide significant employment, contribute to their communities and the whole team at the SBCI feels like we are making a difference to this critical sector every day. The part of my job I enjoy most is meeting the people we are helping – be they businesses owners, farmers or fishers – and hearing about the positive impact of what we do. We support a broad cross-section of the SME sector. 

Tom O’Brien, Managing Partner at Forvis Mazars Ireland, talks to Barry McCall about his plans and priorities for the growing firm On 1 June this year, international audit, tax and advisory firm Mazars and Forvis, the eighth largest public accounting firm in the United States, formally joined forces to create a new global network positioning both firms for continued growth. Looking back on the development, Forvis Mazars Ireland Managing Partner Tom O’Brien says it was a natural progression for Mazars. “Obviously Mazars was largely a European Group,” he explains.  “The American issue had been an important strategic question for us for some time. As we grew – and given the size and nature of some of the mandates Mazars were winning – the need for a stronger presence in the US became more pronounced. We had offices in New York and in other cities on the eastern seaboard, but we wanted to expand to have a coast-to-coast presence with a full-service offer for clients.” The question was whether to do that organically or through acquisition and it was answered by the conversation with Forvis. “Forvis was the eighth largest accountancy firm in the US and was of similar size to Mazars,” O’Brien notes.  “It also had a similar offering and capability and approach to client engagement. There was an alignment of views and clear synergies to be had. We saw it as a good fit straight away. It was a win-win for both organisations. Mazars would get a US coast-to-coast presence while Forvis would get a significant presence across Europe.” The deal was not a merger, O’Brien emphasises. “The two firms have retained their independent ownership but operate under the same brand with a common approach to client service, quality standards and work methodologies. Everything is the same in terms of the client experience. This has created a new global top 10 network, the first new entrant into those rankings for a very long time.” He is enthused by the potential of the new network, both for Forvis Mazars Ireland and its clients.  “It is a very exciting time. For our clients with a presence in the US or ambitions to expand into that market, we have a really strong presence there now as well as access to all of the expertise and sectoral specialisms they had come to expect from Mazars here in Europe,” O’Brien says.  “From an Irish perspective, our expectation is that the network will open the door for FDI business and underpin our growth plans for the future.” James Byrne & Company merger Closer to home, Forvis Mazars’ recent merger with James Byrne & Company in Cork marked another important milestone for the firm.  “However hard it was to break into the US, it was even harder to break into Cork,” O’Brien notes with some humour.  “It was always our ambition to be a truly national firm, and you can’t claim to be that without a significant presence in the country’s second largest city.” Once again it was a question of whether this aim would be achieved through organic growth or partnering with another firm.  “When we first met Fiona and John Byrne, we came to the view that partnering was the way to go. When they say that people do business with people, it really is true. Straight away we could see the alignment of culture and values with both sides sharing a common approach to professional practice and client service. It is a really good fit.” Further growth plans O’Brien’s growth ambitions do not end with the merger. “We have a full-service capability in the Cork office with 30 staff at present. We aim to grow this to 60 very, very quickly. With our offices in Galway, Limerick, Cork and Dublin, we really are a national firm now.” Mergers and acquisitions (M&A) have long been part of the Forvis Mazars’s growth strategy. “We’ve never been afraid of it,” O’Brien says.  “More recently, we have been very active in hiring teams where they can add to our existing service offering to clients. We have been quite nimble and open to a variety of options when it comes to growing the practice.” This growth strategy will continue. “I have been with the firm for 20 years and it’s been a very exciting time. We have a very young partner group with an average age in the mid-40s. They are a very ambitious and energetic bunch, and they certainly keep you on your toes. We have achieved high double-digit growth over the last number of years.  “When I became Managing Partner in 2022, I set a target of growing the firm to 750 people and a turnover of €75 million by 2025. We were at €55 million in revenues at the time.  “This year we will exceed the target when we breach €80 million for the first time, and we are now quickly closing in on becoming a €100 million firm. We have grown to 920 staff around the country and are on target to reach 1,000 next year.” This growth is coming from all areas of the firm, but O’Brien highlights recent successes in winning audit business with blue-chip clients, including Bank of America and Wells Fargo among others.  “These types of clients were the traditional preserve of the Big Four, but, as clients see what we can do, they have invited us to pitch for that work. We are very much playing in that sphere now. The market was crying out for alternatives to the traditional large firms, and we are providing that much needed competition.” The Forvis Mazars M&A team has also been involved in several significant transactions this year. “That space is very interesting and has been very strong for us,” O’Brien says.  “In May, we held the inaugural Mazars Irish Private Equity Awards. It was the first event of its kind for the private equity and corporate finance sector in Ireland. We had 500 people in the room and could have had double that, such was the response. That is an indication of our standing and profile in the market.” O’Brien attributes this standing to the firm’s unwavering focus on the client experience. “We strive to ensure it is superior to anything else in the market while delivering the levels of technical excellence our clients have come to expect,” he says. “We are also focused on doing the little things right – things like responsiveness to calls and queries, proactive client engagement, meeting deadlines and a partner-led approach to all client engagements. They all matter. The challenge for us now is to continue to grow our team and invest in technology and emerging business lines to respond to changing client needs.” Economic outlook Looking to the wider economy, O’Brien sees some challenges ahead for Ireland, particularly in the battle for foreign direct investment (FDI).  “When we look back at the various issues that have hit Ireland over recent years, the domestic economy has proven to be remarkably resilient. The FDI sector is strong, but there are certainly headwinds on the horizon,” he says. “The Apple case sets a precedent on competition and state aid rules and there is strong and growing lobbying in the EU from some of the larger member states for an easing of state aid rules across sectors like technology, chips and semiconductors, which will potentially make it more difficult for countries like Ireland to attract that business. “Domestically, everyone knows we have infrastructure, housing and public services issues. When it comes to deciding what to do with the €14 billion Apple windfall, there is an argument that we should listen to the FDI community to address some of its pain points in areas like housing for staff and transport and other obstacles to growth. This perhaps would be a good starting point in deciding what to do with the Apple money.”

As SD Worx plans further expansion in Ireland, Country Lead Eimear Byrne, FCA, talks to Barry McCall about her role in the Belgian company’s entry into the Irish market and ongoing investment In February this year, payroll and HR solutions provider SD Worx announced plans to create 40 jobs in Ireland over two years, growing its team to 115 as part of a €2.9 million investment in its workforce.  More recently, the company unveiled a separate €3 million investment in its payroll offering, which will now be made available to SMEs in Ireland.  Historically, servicing medium and large enterprises with over 250 employees, SD Worx will now offer its payroll solution to smaller businesses across all industries. The move comes as SMEs in Ireland continue to face mounting challenges, including intense competition for top talent, increasing regulations and rising costs. For Eimear Byrne, FCA, Country Lead at SD Worx Ireland, it marks the beginning of a new chapter in a career that has seen her move from the Big Four environment into industry where she played a key role in readying Irish company Intelligo for its 2022 acquisition by Belgium-headquartered SD Worx. “We have scaled up our capabilities so that businesses that may lack the necessary internal resources can keep pace with evolving payroll trends and requirements,” says Byrne. “Our new offering means SMEs can continue to grow and thrive with on-hand payroll support and cost certainty.” Preparing for acquisition The SD Worx brand may be relatively new to Ireland, but its service offering is already well-established here, Byrne says: “Our enterprise-grade payroll solution pays one-in-five employees in Ireland’s corporate sector.” Byrne was appointed as SD Worx Country Lead for Ireland following the Intelligo acquisition, having formerly held the role of Intelligo’s Head of Finance and Operations.  “I was on maternity leave when the approach came from the founders of Intelligo to manage the sale of the company to SD Worx,” she recalls.  “It was a pivotal moment – managing the disposal and preparing for a new chapter in my career. I took charge of every aspect of the process, becoming the key point of contact between the founders and SD Worx. It stands out as a highlight in my career, showcasing what can be achieved when you step up to new challenges.”  Byrne began her career in 2004 in the tax department of KPMG where she dealt with a wide range of clients across a variety of sectors.  “I qualified in accountancy and tax between 2004 and 2008 and got fantastic exposure to the commercial world. It is a great foundation for a career. I have only positive things to say about working for a Big Four professional services firm,” she says. Byrne left KPMG in 2008 to travel for a year. “I felt I had been sitting too long at a desk,” she explains. Moving into industry On her return to Ireland, she decided to move into industry. “While I loved the exposure to a lot of different companies, I wanted to drive one company forward,” she says. “I joined Atlanco Rimec in 2009. It was an Irish-owned and headquartered temporary labour provider, with customers in several overseas countries.  “I was the group accountant and prepared consolidated accounts for the different countries and was also involved in commercial contracts. I decided to move on in 2010. I worked with some fantastic people there, but I felt ready for new opportunities and to pursue the next stage in my career.” From there, Byrne went to work with the late solicitor and businessman Ivor Fitzpatrick as Finance Director for his private businesses.  “Ivor Fitzpatrick owned a number of different businesses in addition to his prestigious law firm, which included telecoms for aviation and maritime industries, the Christina O yacht formerly owned by Aristotle Onassis and hospitality, commercial property, debt management and other interests,” she says.  “Through managing these businesses, I got involved in operations and really enjoyed it. Working with a fascinating visionary like Ivor with such incredible intelligence was a learning experience that shaped my approach to business and management.  “I made the decision to move on when I was starting a family as there was a lot of travel involved and I couldn’t do both.” Improving structure and processes This decision brought Byrne into the next phase of her career when she joined the payroll software company Intelligo in 2016.  “They had always used external accountants and weren’t sure if they needed someone internally, but had been advised to take on a financial controller and I quickly saw opportunities to help the two founders drive the business forward,” she recalls. “I focused on harnessing data that hadn’t been explored, which led to some immediate but significant improvements.  I standardised processes and brought more structure.  “With improved processes and better resource allocation, we were able to respond to customer needs more efficiently, deliver higher service standards and ensure consistent quality across all channels.” The impact on revenue and EBITDA was quite dramatic. “We had compound annual growth of almost 20 percent every year and higher post-COVID.” Byrne also set up other departments to professionalise the management of the company. “The employee base grew by more than 50 percent from when I joined up to our acquisition,” she says.  “I first set up the finance function and then HR. In 2018, I led a project to obtain an independent valuation and complete the buyback of shares to put the entire shareholding into the founders’ hands.  “To facilitate the buyback, we did a corporate restructure and we took on debt finance to ensure the continued growth of the company. It was an invaluable experience for the subsequent acquisition by SD Worx.” Next up for Intelligo was a new legal department. “We had outsourced our legal work but that wasn’t always the best fit for our business. External advisors might not fully understand internal operations,” explains Byrne.  “Evergreen contracts set out ways of operating that no longer align with the business or the industry, for example. I took the lead and revised our contracts, becoming the point of contact for negotiations with every client.  “As a result, we were able to streamline client interactions, reduce operational headaches and ultimately enhance the overall customer experience. We appointed an in-house legal counsel after that to support our continued growth.” Delivering optimum profit Looking back, Byrne says her biggest achievement was ensuring every revenue stream yielded optimum profit.  “It was about getting more structured every year and understanding how to drive efficiency in the business,” she says. The next chapter for Byrne was preparing the exit plan for Intelligo’s two founders. “There was a lot of consolidation in the market. COVID was a big driver of that as it introduced a lot of new payroll regulations overnight.” SD Worx has been providing payroll services across Europe since 1945 and, up until the acquisition, had been using Intelligo software for payroll processing in Ireland.  “They didn’t own payroll IP in Ireland, and they wanted to de-risk their payroll offering to clients. Intelligo had a very impressive client base of over 300 medium-to-large-sized enterprises, many of them international,” Byrne says.  “SD Worx saw Ireland as a hub of business interaction with an excellent crossover with their pre-existing international clients.  “Through acquisition, we still deliver exceptional payroll solutions but can now offer much more by expanding our product portfolio to include workforce management, HR, talent management, data and analytics. We can support in-house service as well as provide outsourced solutions and consultancy.” M&A trajectory in European markets SD Worx has 90,000 customers across Europe and employs 8,000 people. “It is a huge company, which is still growing,” Byrne says. “It is on an M&A trajectory with the aim of being the European leader in integrated payroll and HR solutions, supporting clients along the whole employee journey from recruitment to retirement. My role as Country Lead is to deliver that vision in Ireland.” This vision was the driving force behind the company’s recent entry into Ireland’s SME market for the first time.  “We have taken our mid-market and large enterprise knowledge and expertise and applied that to SMEs,” Byrne says.  “We are also adding new products. Last year, it was workforce management. This year, it is an HR solution. Talent management and an academy for learning and development are next. We will continue to add products as we establish ourselves as an integrated provider of payroll and HR solutions for Ireland.” SD Worx will also continue to innovate and enhance its flagship payroll technology, MegaPay. “Payroll is complicated, and it changes very fast,” Byrne says.  “We need to pivot very quickly to accommodate things like statutory sick pay change, auto-enrolment pensions and enhanced expense reporting, which was as big a change as PAYE modernisation.  “The increased administrative burden makes it difficult for SMEs to stay abreast. As a result, we are seeing demand for webinars and newsletters to keep our clients updated.” Demand for outsourcing integrated payroll and HR services is also on the rise. “If a company does this in-house, there can be a point of exposure,” Byrne says.  “If a person looking after payroll in-house becomes sick, there are compliance and other risks. Outsourcing to SD Worx removes risk and deals with compliance.  “We deliver better data and analytics to our clients who get a more holistic view of how their business is operating and performing. Our integrated HR and payroll and talent management solutions help them manage people costs to drive efficiencies and profitability.”

IDA Chair Feargal O’Rourke, FCA, talks to Accountancy Ireland about the inward investment agency’s plans and priorities at a “critical juncture” in Ireland’s FDI journey Feargal O’Rourke, FCA, assumed the role of Chair of IDA Ireland in January 2024 at a significant time for the inward investment agency, which celebrates its 75th anniversary this year – and, he says, a “critical juncture” in Ireland’s foreign direct investment (FDI) journey. O’Rourke joined the board of IDA Ireland after stepping down as Managing Partner of PwC Ireland in October 2023 following a storied 37-year career with the firm. In his new role, working alongside IDA Ireland Chief Executive Michael Lohan, time is, he says, “of the essence.” “The one thing I am always paranoid about is complacency, and I think you really do need to have a paranoia about that,” O’Rourke tells Accountancy Ireland.  “Right now, I think Ireland has ‘amber lights’ on infrastructure and we need to put the foot down. We need to invest in more housing. We need to invest in the grid. We need to invest in offshore energy.  “My biggest concern is speed. There are plans in place, but I constantly ask myself, ‘Are we moving fast enough? Can we move faster?’ “I think there is a broad consensus emerging that infrastructure is moving up our list of priorities.  “I take the view that capital spend on infrastructure is an investment. It is not an outflow of money. Deferring a project is a cost. It is not a saving because we will have to do it at some point, and it may cost more then.” New five-year strategy The single biggest task for IDA Ireland as an organisation currently is finalising a new five-year strategy, which will run from 2025 to 2029, O’Rourke says.  “We are doing this against the backdrop of significant geopolitical uncertainty. There is a more muted pace of growth in the global economy and more active industrial policy from some competitor nations,” he says. “There is also the challenge of climate change and the opportunity of the green transition, companies globally grappling with the next step on their diverse digitalisation journeys and, of course, the revolution that is taking place in artificial intelligence.” Ireland’s ability to continue competing in this fast-changing world will be dependent on having the right set of enabling conditions in place”, O’Rourke says.  “As we face challenges in terms of our national competitiveness relating to energy costs and renewable energy provision, housing, infrastructure and utilities, countries around the world are vying to win the race for the next generation of FDI growth. “The opportunity cost of not addressing these issues in a timely manner – particularly sustainable energy supply – risks being sizeable,” he warns. Storied career in practice A native of Athlone, O’Rourke studied commerce and accounting at University College Dublin and qualified as a Chartered Accountant with PwC in 1989. He is also an Associate of the Irish Tax Institute and current Chair of the Institute of International and European Affairs, the Irish-based international think tank. “My father left school at 16, so he always placed a big emphasis on education and business,” O’Rourke says. “He thought I should qualify as a Chartered Accountant and the ‘Chartered’ bit was very important to him, because he felt it had a cachet. That was back in the eighties, and I think the qualification still holds a distinction today. “I remember sitting my final accounting exams thinking, ‘I wonder what this bit of paper will do for my life?’ “There is no doubt that having the Chartered Accountant qualification contributed so much to me living out my professional dreams in the years that followed. The status it brought with it is hugely important and I think the standing of the qualification is as strong today as it was when I qualified.” O’Rourke joined PwC in Dublin in 1986 and remained with the firm for 37 years, holding the position of Managing Partner for the last eight. “I joined what was then Price Waterhouse on 8 October 1986, with the intention of qualifying as a Chartered Accountant and then returning home to Athlone,” he recalls. “Thirty-seven years later – to the day – I retired from PwC having had a wonderfully fulfilling career that was beyond any expectations I had when I joined.” His experience with the firm instilled in O’Rourke the importance of strategic planning for long term success – and it is a lesson he has brought with him to IDA Ireland. “You can’t just think about an organisation as it exists today, and the current generation. You must ask yourself, ‘when I’m 20 and 30 years gone, will I have seeded the fields to ensure it continues to succeed long into the future?’” With Central Statistics Office figures released earlier this year predicting Ireland’s population could grow to over seven million by 2057, O’Rourke’s vision for IDA Ireland is equally long term. “In my role with IDA Ireland today, I am thinking ahead to 25 or 30 years from now and asking, ‘what will Ireland look like then?’ “We have got to play our part in advising the system today if we want to have the right industrial base in the years ahead, not just to continue to attract FDI but also to support indigenous businesses and wider society at a time of ongoing population growth. “I feel a responsibility, as do many others in the system, to say, ‘okay, how does this organisation contribute to ensuring that we will have a successful society in which there are plenty of jobs for people? Do we have the infrastructure we need – both societal and industrial – whether that be in terms of housing, energy supply, water or transport?’  “These are as much societal issues as they are business issues and IDA Ireland will play its part. Building capacity is crucial. Ireland is facing infrastructural capacity issues, and they are a priority for IDA Ireland, particularly over the next five to six years.” FDI and global tax developments Having been appointed as a Tax Partner in 1996 and Head of PwC’s Tax Practice in 2011, O’Rourke spent a significant portion of his career working in Foreign Direct Investment (FDI).  “I worked extensively – but not exclusively – with household names from the West Coast of the US. I was privileged to work with many of the companies that now rank among the largest FDI employers in the country,” he says. “I still have the memo in which my then Partner Tadhg O’Donoghue said, ‘I’m going to ask you to focus on a particular area of tax – FDI.’ That one line in a memo almost 40 years ago completely determined my career and my life thereafter.” O’Rourke saw the evolution of Ireland’s FDI landscape firsthand over that span of time. “Tax became central to Ireland’s FDI proposition, delivering a major competitive advantage for us back in the eighties and nineties. It has really played a central role in how Ireland has positioned itself to attract FDI,” he says. As Head of PwC’s Tax Practice, O’Rourke also collaborated extensively with companies, officials, governmental bodies and the Organisation for Economic Cooperation and Development on the Base erosion and profit shifting (BEPS) initiative introduced in 2013 to curb tax avoidance among multinationals operating across different jurisdictions. “Successive Irish Governments over the past 15 years have really got it right on our FDI-related tax policy and we are now seeing the benefits of this in terms of our corporate tax take,” he says.  “That contribution to the State coffers is being used to build hospitals and schools, but other countries in the post-BEPS era are moving fast on their own FDI-friendly tax strategies, and I think we need to move quickly as well and make sure we continue to be agile and responsive, looking around the world and asking, ‘what lessons can we learn here from what others are doing?’” “A world-class organisation” Just over 10 months into his role with IDA Ireland, O’Rourke’s pride in the organisation is palpable. “In sporting terms, IDA Ireland is like Limerick in hurling or Manchester City in football,” O’Rourke says. “We have a fantastic record of success, but once the season is over, we must do it all again. We can survive a year where we are not top of the pile, but we can’t afford to enter a period where we are living off past glories. “You wouldn’t say to the Limerick hurling team, ‘you need to ease off the training for a few years and let everyone else catch up,’ nor would you say to Manchester City, ‘you shouldn’t buy any good players for now.’ “I don’t think IDA Ireland as an organisation should ever say, ‘we are doing really well, we could pull back a bit’. Life doesn’t work like that. Michael Lohan, our Chief Executive, often says, ‘when you turn off the tap, there is no guarantee that, when you turn it back on again, water will come out.’” As it stands, O’Rourke sees IDA Ireland as a “world-class organisation.” “This is not just my own view,” he says. “Over the course of my 37 years in professional services, I was repeatedly told this by clients who had experience of being ‘courted’ by a variety of inward investment agencies from around the world. “Today, our IDA Ireland clients tell me time and again, ‘we feel welcome in Ireland; we feel supported’.” These IDA Ireland client companies employ 300,583 people directly, accounting for 11 percent of total employment in Ireland currently. They spend a combined €35.8 billion annually on payroll and Irish-sourced goods and services, and €15.5 billion in capital expenditure. In total, 248 investments were approved by IDA Ireland in 2023 and a further 131 in the first six months of this year, with the potential to create some 27,000 jobs. “While I expect the pipeline of projects to continue to be strong as we move through 2024, the challenges we face to stay at the forefront of attractive locations to invest in are significant,” O’Rourke says. “If we stand back, there is no doubt that FDI flows have slowed a bit compared to, say, four or five years ago.  “This is, in part, because we have probably already seen the high watermark in globalisation. In retrospect, I think that occurred somewhere towards the end of the last decade.  “The good news for Ireland is that we are continuing to win FDI projects of substance and the 300,000 FDI direct employment figure is a new plateau for us.  “For many years, the benchmark for direct employment was 200,000. Now, our focus is on keeping that figure above 300,000 as we look to build on the next FDI cycle.” Emerging opportunities As IDA Ireland looks to future FDI growth, its focus will be centred on emerging opportunities in the ongoing green and digital transitions reshaping the global economy, O’Rourke says. “We recognise the need to help the Irish operations of global firms transform to thrive in a world that is changing fast.  “We actively partner with client companies on investments in talent development, digitalisation, research and development, innovation and sustainability, including decarbonisation,” he says. “When I was Managing Partner at PwC and we were at our most profitable and successful, we decided we needed to invest heavily in digitisation.  “It wasn’t just an investment in technology, it was an investment in our culture. Even though there were no clouds on the horizon, we could see that, if we stayed still, we might have another few great years – but, really, we needed to invest in the technology to continue growing beyond that. “Our focus now at IDA Ireland is on helping our clients to invest in the areas they need to focus on to do the same – to prepare to continue succeeding in the future. This means supporting them on investment in digitalisation and sustainability.” Collectively, IDA Ireland client companies spend over €7 billion on in-house research, development and innovation (RD&I) annually.  IDA Ireland approved 25 sustainability projects last year, focused on carbon abatement and building Ireland’s green economy.  New RD&I projects won by the semi-state agency in 2023 came with associated client spend commitments of €1.4 billion.  “With the requisite enabling conditions in place at a national level, aligned to emerging FDI attractiveness factors – such as AI skills and renewable, reliable and affordable energy – I think we will be well-placed to capture new investment opportunities,” O’Rourke says. A particular focus is Ireland’s future capacity to generate renewable energy – specifically, offshore energy. “We have been very vocal about the importance and potential of offshore energy. If Ireland gets its offshore energy strategy right – both fixed and floating – we could be in a surplus energy position in 10 years’ time,” he says. “That could transform our capacity to attract energy-intensive multinationals from various industries, because we would potentially be in a situation where have no constraints in relation to our ability to supply green energy.” O’Rourke is, he says, a born optimist. “When it comes to our strategy at IDA Ireland over the next five years, I do genuinely and fully believe that our best years are ahead of us.”

Having ascended to the role of Finance Minister just four months ago, this year’s budget was Minister Jack Chambers’ first at the helm of the finance portfolio but the last we will see from the current Government.  With a general election now firmly on the horizon, Budget 2025 was unsurprisingly brimming with generous giveaways for individual taxpayers, including a €1 billion bouquet of personal tax reductions alongside a €2.2 billion hamper of cost-of-living measures.  The giveaways were spread so universally that most individual taxpayers, even those arguably not in need of them, got some degree of ‘bounce’ from the Government but, in a budget so warmly generous, some constituencies were left out in the cold.  Sweetening the electorate Among the suite of income tax measures announced in Budget 2025 were a €2,000 increase to the standard rate cut-off point, a one percent reduction to the four percent rate of Universal Social Charge and a €125 boost to each of the main personal tax credits.  Taking into account the additional cost-of-living payments also announced (including €250 in new electricity credits, and a double payment of child benefit in November and December) the average worker will be about €1,000 better off over the next 12 months.  Add to this an increase to the inheritance tax thresholds across all groupings and one would be forgiven for thinking this was a Celtic Tiger budget of the early to mid-2000s.  Reacting to the package, the Fiscal Advisory Council pointed out how “only about half of the Government’s €2.2 billion cost-of-living measures were targeted,” and emphasised how “the same supports could have been provided to those most in need at a much lower cost”.  Indeed, in an economy at near full employment with inflation at its lowest since 2021, it’s hard to see how such excessive giveaways, bolstering individual spending power, don’t ultimately risk overheating an already red-hot economy. The opportunity cost  But Budget 2025’s preoccupation with wooing individual voters in the run-up to an imminent election came at a cost to other constituencies, particularly small businesses.  Despite months of assurances from Ministers that concrete steps would be taken in the Budget to address the burgeoning costs of doing business, many SMEs may rightly feel left out of the Government’s wave of generosity.  Some measures will be welcomed, such as a one-off Energy Subsidy Scheme worth about €4,000 to businesses in the hospitality and retail sectors, as well an increase to the VAT registration thresholds for the supply of goods and services. However, no real steps were taken to address the elephant in the room – namely, ballooning labour costs.  Ask any small business across the country (and we have – in our Survey of Small Businesses conducted this summer) and they will tell you that labour costs are the single biggest operating cost they face today.  And labour costs are now on the rise again – with a six percent increase to the minimum wage announced as part of the Budget package and an additional 1.5 percent uptick in staff pension costs coming down the track as part of pensions auto-enrolment, due to be launched next September.  Budget 2025 offered a real opportunity for Government to take meaningful steps to ease these cost burdens and take the pressure off small businesses’ narrowing bottom lines.  One option might have been to lower the rate of Employers’ PRSI by 1.5 percent to mitigate the concurrent cost of pensions auto-enrolment to employers, particularly those who employ workers in and around the minimum wage.  We estimate that doing so would have cost in the region of €63 million per annum based on 164,000 people working full-time at the minimum wage.  Such a step would have made a huge difference to small businesses across the country and comes with a more modest price tag than some of the more gratuitous cost-of-living measures included in the final budget package.  But alas, because it is individuals and not businesses who get to vote on election day, perhaps such measures failed to meet the objective of political expediency.  Stephen Lowry is Head of Public Policy at Chartered Accountants Ireland

The OECD has published a working paper on the implications for OECD tax systems of tax arbitrage through closely held businesses. The paper finds that tax incentives to incorporate and earn capital income through corporations have increased in the last two decades. It shows that there has been an increase in incorporated businesses in many OECD countries, which has been partly driven by tax factors. The paper also finds that, in many countries, a combination of tax system features, related to corporate, dividend, capital gains, gift and inheritance taxation, provide particularly strong incentives to retain earnings inside corporations.

The Institute’s Advocacy and Voice Department is hiring a new Tax Manager. The Department is responsible for the tax and public policy agenda of Chartered Accountants Ireland. We collaborate with expert colleagues drawn from practice and industry, developing, and advocating on policy matters relating to tax, financial reporting, audit and assurance, ethics and governance, and business law. The department numbers over twenty professionals. The successful candidate will report into the Institute's Tax Leader (Head of Tax). You can find more information at the above link. If you are interested in applying, send your CV and a cover letter to hr@charteredaccountants.ie.

Revenue has updated the Tax and Duty Manual which provides information in relation to DAC2 Common Reporting Standard (CRS) reporting in Ireland. The guidance has been updated to provide further clarification on the additional guidance on ResCountry Code (section 7.5).