Welcome to this week’s Technical Roundup.   In developments this week, the European Commission’s EU Green Week is an opportunity to raise awareness, promote and discuss European environmental policy and will take place from Saturday, 3 June to Sunday, 11 June 2023 under the overarching theme of the European Green Deal; the Central Bank has published research and information on ongoing work to ensure consumers are protected in a changing economic landscape.    Read more on these and other developments that may be of interest to members below.   Financial Reporting The European Financial Reporting Advisory Group (EFRAG) is consulting on its draft endorsement advice letter on International Tax Reform – Pillar Two Model Rules. Comments are requested by EFRAG by 24 May 2023.  EFRAG has also issued its Recommendations and Feedback statement which summarises the main comments received by EFRAG on its recent discussion paper- Better Information on Intangibles – Which is the best way to go?  The IFRS Foundation has published its annual report and audited financial statements for the year ended 31 December 2022. Marking a transformative year for the IFRS Foundation, the report highlights significant accomplishments by its two boards, the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB). The two boards are united in the mission to provide better information about companies all over the world so that investors and other capital market participants can make better decisions―better information for better decisions.  Audit The Staff of the International Ethics Standards Board for Accountants released a jurisdictional PIE database to further support the adoption and effective implementation of the revisions to the definitions of listed entity and PIE in the International Code of Ethics for Professional Accountants. The revised PIE provisions specify a broader list of categories of entities as PIEs whose audits should be subject to additional independence requirements to meet stakeholders’ heightened expectations concerning auditor independence when an entity is a PIE.  The International Auditing and Assurance Standards Board issued proposed revisions to its current standard on going concern, International Standard on Auditing 570 (Revised), Going Concern.  The proposed changes aim to:  Promote consistent practice and behaviour and facilitate effective responses to identified risks of material misstatement related to going concern;  Strengthen the auditor’s evaluation of management’s assessment of going concern, including reinforcing the importance, throughout the audit, of the appropriate exercise of professional skepticism; and  Enhance transparency with respect to the auditor’s responsibilities and work related to going concern where appropriate, including strengthening communications and reporting requirements.  Comments are requested by August 24, 2023.  Sustainability  The European Single Electronic Format’s (ESEF) implementation has taught us that timely preparation and communication are the most important factors for the success of relevant IT projects. Now, EU Member States have started implementing the Corporate Sustainability Reporting Directive (CSRD) for transposition. Accountancy Europe is hosting a webinar on 16 May – ‘Towards digital corporate reporting with CSRD’ to explore this area.    The European Commission’s EU Green Week is an opportunity to raise awareness, promote and discuss European environmental policy. Organised by Directorate-General for Environment every year, this high-level event attracts policymakers, leading environmentalists, stakeholders from across Europe to discuss pressing issues related to environmental protection and sustainability. This year’s topic highlights the urgent need for sustainability in decision-making.  EU Green Week 2023 will take place from Saturday 3 June to Sunday 11 June 2023 under the overarching theme of the European Green Deal.  In the April 2023 issue of the ISSB podcast, ISSB Vice-Chair Sue Lloyd talks to Chair Emmanuel Faber about the latest developments and discussions from the board.  The discussion covers:  an update on foundational work;  summary of decisions made at the ISSB’s supplementary April 2023 meeting; and  decisions made at the April 2023 ISSB meeting on the ISSB’s Consultation on Agenda Priorities and the International Applicability of the SASB Standards project.  Accountancy Europe has issued a call for an ambitious EU Due Diligence Framework to meet the objectives of the Corporate Sustainability Due Diligence Directive. In its call, Accountancy Europe has set out its recommendations under the following headings;  Support Affected SMEs  Maintain Directors’ role and duties  Set up high quality independent third-party verification  Ensure workable rules for civil liability enforcement  In a recent webinar hosted by the International Federation of Accountants (IFAC), the International Public Sector Accounting Standards Board (IPSASB) and Accountancy Europe the issue of sustainability reporting in the public sector was discussed and the need to develop public sector specific sustainability reporting standards.  Other Areas of Interest   The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) have issued their Spring 2023 Joint Committee Report on risks and vulnerabilities in the EU financial system. While noting that EU financial markets remained broadly stable despite the challenging macro environment and recent market pressure in the banking sector, the three Authorities are calling on national supervisors, financial institutions and market participants to remain vigilant in the face of mounting risks.  A new resource, offering advice on how to improve your cyber security and links to information on dealing with cyber-attacks, has this week been published by NICVA (The Northern Ireland Council for Voluntary Action).  The resource, available at Advice for those experiencing cyber attacks | NICVA, was published following the news that hackers had stolen data from charities and community organisations in a cyber-attack on a Londonderry-based IT company.  The Central Bank has published research and information on ongoing work to ensure consumers are protected in a changing economic landscape.  This new research sheds light on the resilience of households to these developments and, more broadly, on how credit markets have been evolving in this rapidly evolving environment. The Central Bank is also publishing a note on the ongoing  work to ensure regulated firms meet the expectations set in its November 2022 Dear CEO Letter on protecting consumers in a changing economic landscape, relating to mortgages secured on a borrower’s primary residence.  The Irish Competition and Consumer Protection Commission recently launched a major campaign to help Irish consumers with their financial dilemmas. Read more in their news release here. The campaign highlights the CCPC’s online financial information hub (ccpc.ie/money) and the CCPC Money Tools – a suite of user-friendly online calculators and comparison tools designed to help everyone make good financial decisions. As part of the campaign, the CCPC is rolling out a series of videos answering real-life consumer questions collected from members of the public across Ireland.  The Decision Support Service was launched this week following the full commencement of the Assistant Decision-Making (Capacity) Act 2015 (as amended). The Act has established a modern legal framework to support decision-making by adults who may have difficulty making decisions without help. One of the key reforms is the abolition of the wards of court system. The DSS have published  13 Codes of Practice to provide essential guidance in relation to the practical implementation of the Act. For more information on the DSS, visit www.decisionsupportservice.ie.  The Minister for Finance recently signed an order to commence a large part of the Central Bank (Individual Accountability Framework) Act 2023 with effect from 19 April 2023. The Minister in a press release described the new legislation as a significant enhancement of the powers of the Central Bank and said he looks forward to commencing the remainder of the Act later this year. He said cultural and practical change in the banking sector and throughout the financial services industry is required to rebuild trust in the financial sector. The Central Bank (Individual Accountability Framework) Act 2023 should make a significant contribution to bringing about this needed cultural change. This is the ultimate aim of this legislation.  Please join us on 9 May for a webinar on “Navigating Ireland's New Protected Disclosures Law - Legal and Practical Insights” The session will be moderated by Stephen Lowry, Public Policy Manager in the Institute and Lilian Halpin, Technical Manager will take part in the panel with Barry Robinson, Head of Forensic Services at BDO in Ireland, Michael Deeny, Compliance Consultant and Annelie Demred, VP Strategy and Growth Whistlelink. There will be an overview of the new legislation, client insights and experience of implementation. We will also discuss European cross sector experience of protected disclosures legislation and there will be an option to stay on the webinar to view a demonstration of a compliance tool.  The Department of Enterprise, Trade and Employment is holding a webinar on Responsible Business, to be held on Tuesday, 23 May, from 10:00am – 11:30am. Responsible Business encompasses a range of initiatives – some voluntary, some mandatory – aimed at promoting positive business impacts on issues such as climate action and human rights, and it corresponds in important ways with the ESG (environment, social and governance) agenda that is now an established aspect of good corporate governance. In this online event, Minister Simon Coveney TD will provide opening remarks on the Responsible Business agenda. Officials from the Department will follow with short presentations, explaining three Responsible Business initiatives of which enterprises should be aware. The webinar will conclude with a Q&A session. You can register for the webinar here.   For further technical information and updates please visit the Technical Hub on the Institute website.      

The Minister for Finance, Michael McGrath TD, has welcomed European Commission approval of the enhancements to the Temporary Business Energy Support Scheme (TBESS) announced in Finance Bill 2023.The approval has been received under the State Aid Temporary Crisis and Transition Framework (TCTF). The enhancements announced in the Finance Bill (and which were called for by the Institute) include: Extending the scheme to 31 May 2023, with the option to further extend the scheme by Ministerial Order to not later than 31 July 2023, Reducing, with effect from 1 September 2022, the energy cost threshold for qualification for the scheme from a 50 percent increase in electricity or gas costs to a 30 percent increase, and Increasing, from 1 March 2023, the level of relief from 40 percent to 50 percent of eligible costs. The time limit for making claims under the scheme has also been extended. The enhancements are in addition to amendments made in February 2023 to increase the monthly limit to €15,000 per qualifying business in relation to a trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location. These changes took effect from 1 March 2023. Commenting, Minister McGrath said: “I am pleased to note that the European Commission has approved the enhancements to TBESS brought forward in Finance Bill 2023. These changes, in particular the lower entry threshold for the scheme, which is backdated to September 2022, will ensure that additional businesses can benefit from this vital support and I encourage businesses who have not already done so to register for and submit claims under the scheme.” As of 20 April, 28,035 businesses have registered for the scheme. Revenue has approved 35,613 claims to the value of €77.6 million.

Revenue has updated the TBESS guidelines to reflect the enhancements introduced in Finance Bill 2023. A qualifying business can submit claims on Revenue’s Online Service (ROS) for the March and April 2023 claim periods from Monday 17 April 2023. From the week commencing 24 April 2023, Revenue will begin reassessing claims already submitted for the period from 1 September 2022 to 28 February 2023 based on the revised 30 percent energy costs threshold. This means that it will not be necessary for a business to revise claims already submitted for these periods. Once claims have been reassessed, the business will receive a notification to their ROS inbox confirming the reassessment has occurred after which the payment due to the business will be processed. The updated TBESS guidelines also contain deemed reference unit prices for the May 2022 reference period, as provided by the Sustainable Energy Authority of Ireland (based on data provided by suppliers and the Commission for Regulation of Utilities). Further information is available in eBrief no. 096/23.

Revenue has published a new Tax and Duty Manual providing guidance on the operation of the digital games tax credit, as provided for in section 481A TCA 1997 and the Digital Games Regulations 2022. The aim of the measure is to provide an incentive to digital games developers to produce digital games that contribute to the promotion and expression of Irish and European culture. The relief is a corporation tax credit and it may be claimed by digital games development companies.    The relief is available from 22 November 2022 in respect of certain expenditure incurred by digital games development companies on the development of eligible digital games provided certain conditions are met.

Revenue has updated its process for identifying and contacting taxpayers and agents in instances of non-filing of Income Tax returns.  Previously a copy Reminder to File Notice issued to an agent for each notice issued to their linked clients.  To improve efficiency and enhance communications to agents, these agent copies will no longer issue. Instead, a single ROS inbox notification will be sent to each agent, listing out their clients based on linked TAIN that were issued the notice, with a reminder to the agent to file for their clients. The reminder to file outstanding Income Tax returns for the 2021 tax year were issued to taxpayers last week and agents will receive their respective notification lists in the coming days. A sample of the agent notification can be viewed here. 

Revenue has updated its Tax and Duty Manual regarding the tax treatment of the reimbursed travel and subsistence expenses to office holders and employees. The updated guidance clarifies that hybrid employees working part-time from home cannot claim expenses for travelling between home and the office. It also includes the new civil service rates effective from 1 September 2022.

Revenue has updated its Tax and Duty Manual regarding the payment and receipt of interest and royalties without deduction of income tax. The updated manual now includes: Reference to the International Monetary Fund in section 8 'Payments to certain statutorily tax-exempt bodies', and In respect of applications under section 246(3)(d) TCA 1997: To require completed Forms RTS 1A and supporting documents accompany applications, To remove the postal contact address, To provide My Enquiries contact information.

The Department of Finance has published the minutes of the recent Business Tax Stakeholder Forum. The Forum is limited in scope to discussing direct business taxation. It is consultative in nature with the focus on knowledge and information sharing, including reflecting on tax developments at the EU and international level as well as domestic corporation tax legislation. As previously reported, the Institute, under the auspices of the CCAB-I, was represented at the inaugural meeting of the Business Tax Stakeholder Forum. The meeting provided an opportunity for the Institute to engage with the Department of Finance in a constructive and meaningful way. While the forum is not a decision-making body, it is intended to complement the wider engagement process between the Department and its business tax stakeholders.

Revenue has updated its Tax and Duty Manual for State Aid Transparency Requirements: Publication of information regarding State aid granted to individual taxpayers. The manual has been updated to include the following additional schemes that are subject to State aid transparency requirements: Relief for Investment in Digital Games (section 481A of the Taxes Consolidation Act 1997), Accelerated Allowances for Capital Expenditure on Slurry Storage (section 658A of the Taxes Consolidation Act 1997), and Temporary Business Energy Support Scheme (TBESS) (sections 100 to 102 of Finance Act 2022).

The Minister for Finance, Michael McGrath, has welcomed the upgrade of Ireland’s long-term sovereign credit rating by Moody’s to Aa3 from A1 with a stable outlook. The revised rating returns Ireland to Moody’s AA category for the first time since 2010. The upgrade puts Ireland’s rating on a par with core Eurozone countries including France (Aa2), Belgium (Aa3) and Austria (Aa1). Other issuers in the Aa3 category include the United Kingdom and Hong Kong. The Minister for Finance Michael McGrath said: “The announcement by Moody’s of an upgrade to Ireland’s sovereign credit rating is a very positive development, reflecting the ongoing strength of the Irish economy and the public finances. It underlines the importance of Ireland’s prudent fiscal policies and the adoption of a robust fiscal framework. Moody’s expectation that the economy will continue to grow at a solid pace in the near to medium term, albeit slowing from the exceptional rates of growth in 2021 and 2022, is particularly welcome. As a country, we are making progress across a number of fronts, building up our National Reserve Fund, reducing our overall National Debt, and investing in capital infrastructure to underpin our long term well-being and prosperity. In their report, Moody’s note Ireland’s corporation tax receipts are dependent on a relatively small number of firms and I am taking action to address this. I will shortly bring forward proposals to put the National Reserve Fund on a sound long term footing using the windfall corporation tax receipts we have been experiencing.”

The Minister for Finance, Michael McGrath TD, and the Minister for Public Expenditure, National Development Plan Delivery and Reform, Paschal Donohoe TD published the Government’s Stability Programme Update for 2023. This document sets out macroeconomic and fiscal forecasts for the periods 2023-2030 and 2023-2026 respectively. Emerging data suggest that the outlook for the global economy in 2023 may not be as pessimistic as forecast last Autumn. However, the global outlook remains fragile, with heightened uncertainty a key feature in the global environment. It is now expected that headline inflation will average 4.9 per cent this year on the back of an easing in energy prices, however non-energy inflation will remain elevated. The labour market has remained remarkably resilient with record numbers in employment and the unemployment rate standing at 4.3 per cent in March. Commenting on the figures, Minister McGrath said: “Despite multi-decade high inflation rates and heightened global uncertainty, the Irish economy has proven remarkably resilient, most notably in the labour market where the unemployment rate is at a near-record low. At the same time the mobilisation of government supports helped mitigate, to some extent, the impacts of inflationary pressures on households and businesses over the winter months. With energy prices in retreat, it now appears as though inflation, absent any further energy price shock, is on a downward trajectory, though it will remain elevated throughout this year. Headline inflation is expected to average 4.9 per cent this year, before returning to 2½ per cent in 2024.” On the public finances, Minister McGrath said: “Regarding fiscal developments, we are projecting a surplus of €10 billion for this year, the equivalent of 3.5 per cent of national income. This is based on the assumption of tax revenue amounting to almost €89 billion, a growth rate of almost 7 per cent. While this is, of course, very much welcome, the headline surplus this year is heavily dependent on volatile ‘windfall’ corporate tax receipts. Excluding the impact of these receipts, estimated at almost €12 billion this year, an underlying deficit of €1.8 billion is projected for this year. This is a better metric for assessing the resilience of our public finances. From a fiscal perspective, serious challenges lie ahead: an ageing population; risks to the sustainability of corporate tax receipts; de-carbonisation and digitalisation; as well as the fallout for economic activity from rising geopolitical tensions. For example, by the end of this decade, it is estimated that additional age-related expenditure of between €7 and €8 billion per annum, relative to the level of outlays at the beginning of the decade, will be required simply to deliver existing levels of public service. Moreover, we are facing into these challenges from a position of high public debt, with the cost of borrowing increasing. That is why I will shortly be presenting proposals for a longer term focused national reserve fund. Work on such a fund is already at an advanced stage. We are hopefully emerging from the worst of the cost-of-living crisis, though immediate risks remain. However, I am confident that the Irish economy remains resilient especially in light of our robust labour market. The Government will continue to protect those most adversely impacted by cost of living pressures, while managing the public finances in a way that equips the State to address the fiscal challenges in the years ahead.” Further information is available here.

The National Crime Agency in the UK has recently issued its April 2023 edition (Issue 19) of SARs IN ACTION. It contains items such as a summary of the 2022 SARs Annual Report (which can be accessed in full here), which features statistics covering the years 2020-21 and 2021-22, an article on modern slavery and human trafficking, and looks at SARs related to cryptocurrency and  trust or company service providers. It also has some information on the new SARs portal and on two new podcast episodes on Evolving Payments and Banking Firms and the UK Fraud Communications Toolkit.