In its release of the eagerly awaited “Omnibus” proposals on 26 February, the European Commission (EC) has proposed some significant changes to its Sustainability Reporting Regulatory framework. In recent years, many Irish and European companies have been getting to grips with EU Sustainability Directives and Regulations, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy Regulation. These have introduced (or are due to introduce) compliance and reporting requirements for companies falling within their scope. The proposed Omnibus legislation aims to simplify the administrative burden created by the CSRD, the CSDDD and the EU Taxonomy. In releasing the proposals, the EC noted that they will enable businesses “to grow and create quality jobs, attract investments and get the necessary funds for their transition towards a more sustainable economy and help the EU meet the Green Deal's ambitious objectives”. The Omnibus package includes; A proposal for a Directive amending the CSRD and the CSDDD. A proposal which postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028. A draft Delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts (subject to public consultation). A proposal for a Regulation amending the Carbon Border Adjustment Mechanism Regulation. A proposal for a Regulation amending the InvestEu Regulation. CSRD While the proposed Omnibus legislation includes changes to several key pieces of EU legislation, arguably the most impacted area will be the CSRD. Some of the key changes proposed to this Directive include; An increase in the thresholds limits which result in a large company being “in-scope”. This is expected to reduce the number of companies in-scope by approximately 80%. Under the proposed Omnibus legislation, the CSRD reporting requirements will only apply to large undertakings with more than 1,000 employees- ie. an undertaking with; 1,000 employees and either Turnover greater than €50m, or Balance sheet total greater than €25m Listed SMEs will no longer be required to mandatorily report under the CSRD. The introduction of a “Value chain cap”. Companies who are not in-scope of the CSRD will be able to use a voluntary standard (based on the VSME standard developed by EFRAG). This standard will serve to limit the information that CSRD reporters can request from non-CSRD reporters in their value chain. Companies who do not fall in-scope as a result of the revised thresholds may still voluntarily adopt the above-mentioned standard. A commitment to simplify the European Sustainability Reporting Standards (ESRS), including, a reduction in the number of datapoints, clarification of provisions which were deemed unclear and an improvement in consistency with other pieces of legislation. A reversal of the plan for sector-specific standards to be developed and adopted by the European Commission. A change in proposed assurance requirements for Sustainability Reports prepared under the CSRD, with the plan to move to reasonable assurance at some point in the future removed. A postponement of reporting requirements for “wave 2” and “wave 3” companies by 2 years. These waves will now enter into scope for financial years commencing on or after 1 January 2027 and 1 January 2028 respectively. CSDDD In relation to the CSDDD some of the key changes include proposals to; Extend the transposition deadline by one year, to 26 July 2028, and advance the adoption of the guidelines by one year (to July 2026), thereby giving companies more time to prepare. Simplify sustainability due diligence requirements, examples of this include focusing systematic due diligence requirements on direct business partners and reducing the frequency of periodic assessments and monitoring of their partners from annual to five years. Limit the amount of information requested by large companies from their value chain, thereby reducing the burden on SMEs and small mid-caps (250 – 499 employees and either turnover < €100M or Balance Sheet < €86M). Improve the harmonisation of due diligence requirements to ensure a level playing field across the EU. Remove the harmonised EU civil liability conditions and instead, defer to the various national civil liability regimes. Align the requirements on the adoption of transition plans for climate mitigation with the CSRD. The expected benefits of the proposed modifications, as outlined by the European Commission, is a reduced due diligence framework that is less complex and more harmonised, ensuring burden reduction and having a level playing field.    EU Taxonomy The proposed Omnibus legislation also amends the requirements of the EU Taxonomy Regulation and includes an increase in the reporting thresholds for mandatory reporting. Under the proposals, EU Taxonomy reporting would only be mandatory for a smaller number of companies, specifically large companies with;

More than 1,000 employees, and A net turnover of more than €450 million Companies within the scope of CSRD reporting, but who don’t have a net turnover figure of €450 million would be encouraged to voluntarily report. Additionally, companies may choose to voluntarily report on their partial Taxonomy alignment where they only meet certain Taxonomy criteria. The EC will consult on changes to the Taxonomy Disclosures Delegated Act and the Taxonomy Climate and Environmental Delegated Acts, with a view to simplifying these Acts. The Commission will also hold a public consultation asking for feedback on two alternative options to simplifying the “Do No Significant Harm” criteria. Benefits The European Commission have noted that there are several benefits which are expected to arise from the Omnibus Proposals, including; A streamlining of, and better alignment of, the CSRD and CSDDD requirements. Estimated total savings in administrative costs of approximately €6.3bn. Estimated to mobilise additional public and private investment capacity of €50bn to support policy priorities. Protection for SMEs from excessive sustainability information requests when they are in the value chain of companies reporting under the CSRD. An option for companies who are not in the scope of the CSRD to voluntarily report on their sustainability activities. Next steps These proposals will now enter trialogue negotiations between the European Parliament and the European Council where amendments may be made prior to its introduction. The extension of two years has been proposed for wave 2 and wave 3 by the Council to facilitate this transition preventing a situation where companies begin reporting under CSRD only to be potentially excluded shortly afterward. There is an urgent requirement to give clarity to companies and therefore finalise the CSRD and CSDDD adjustments as a matter of priority. It is expected that discussions on the broader Omnibus Package could extend over several months. Chartered Accountants Ireland is reviewing the omnibus simplification package with stakeholders to assess how we best continue to support businesses whatever size and whatever stage of the process they are at, to meet the standards, and how we train the accountants of the future to meet ESG-related legal requirements.   For further information in relation to this please see the European Commission's Q&A page.

Chartered Accountants Ireland was delighted to see the publication this week of a revised specification for Leaving Cert accounting by the National Council for Curriculum and Assessment. The development of a new curriculum that accurately reflects the role of the modern accountant has long been an advocacy priority for the Institute and following extensive engagement with officials from the Department of Education, the publication of the revised specification is an important milestone.  Leaving Certificate Accounting students will now have the opportunity to engage with themes including digitalisation, sustainability, ethical decision-making, and financial regulatory concerns as part of their coursework.   The draft specification is open for public consultation until Friday 28 April and the Institute (under the auspices of CCAB-I) will be making a submission in response to this which will be published on our website. You can read more about the subject development work by the NCCA here.

In Irish news this week, Revenue published updated guidance on employer provided vehicles and we issue a reminder that the deadline for submitting the 2024 share related returns is 31 March 2025. In UK news, the HMRC Making Tax Digital team are keen to visit agents in Northern Ireland and the latest Finance Bill continues its progress through the parliamentary process. In International news, the EU Economic and Financial Affairs Council (ECOFIN) adopts new legislation on electronic VAT Exemption Certificates. Ireland 1. We remind readers that the deadline for filing the annual share scheme returns for 2024 is 31 March 2025. 2. Revenue has updated its guidance on Employer Provided Vehicles. UK 3. The latest UK Finance Bill continues its progress through the parliamentary process. 4. HMRC’s Making Tax Digital team would like to meet with agents in Northern Ireland next week. International 5. Read about new legislation adopted by ECOFIN on electronic VAT Exemption Certificates  Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s post EU exit corner.

Today (26 February), the European Commission published its anticipated omnibus simplification package, which aims to reduce reporting burdens for companies, particularly SMEs. The package includes simplifications in sustainability reporting (CSRD), sustainability due diligence (CSDDD), and sustainable activity taxonomy (EU Taxonomy). The omnibus represents a dramatic change to several key pillars of the EU Green Deal, the key policy initiative in the path towards net zero by 2050. While we very much support simplification efforts to enhance the competitiveness of the EU’s single market, preserving regulatory certainty, clarity and stability for business is of utmost importance and is also key to remaining competitive.   As the largest professional body on the island of Ireland, representing over 39,000 members and educating over 6,600 students, the Institute has worked closely with members and member firms to equip them with the expertise and skills to prepare for and implement the CSRD both from a reporting and assurance perspective. Many of these have invested significant resources to upskill and meet existing requirements, and the changes proposed today may require several to pivot and understand new ones. Chartered Accountants Ireland is reviewing today’s omnibus simplification package with stakeholders to assess how we best continue to support businesses whatever size and whatever stage of the process they are at, to meet the standards, and how we train the accountants of the future to meet ESG-related legal requirements.  European Commission news release Commission simplifies rules on sustainability and EU investments

  Today's Chartered Accountants Ireland ESG Network meeting was joined by guest speaker David Connolly, a Fellow of Chartered Accountants Ireland, and Director with EY’s Climate Change and Sustainability Services, a specialized team within EY dedicated to helping financial institutions navigate the complex world of climate change and sustainability. In this recording  you can watch David's insights from Wave 1 reporting on the day the EU released its 'omnibus' package of simplification proposals. These propose to amend four key rules from the European Green Deal: The Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy on Sustainable Investments and the Carbon Border Adjustment Mechanism (CBAM).

HMRC has become aware of a scam email purporting to come from HMRC asking firms to submit an Annual Supervisory Return with payment of fees as part of their AML supervision. This email is being sent to both HMRC supervised firms and accountancy service providers supervised by the professional bodies. Although the content of the fraudulent email looks very similar to the official gov.uk website it appears to be sent from a false email address ending on @taxuk-access.services. Should you receive a fraudulent email purporting to be from HMRC, please do not click on the links and report this via https://www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-fraudulent-emails

Revenue has recently updated its Guide to Exchange of Information to reflect new exchange relationships which commenced in 2024 and 2025 to date

Revenue has updated its guidance on Revenue Procedures for Personal Insolvency Caseworking. The updates relate to the following: The Collector General’s Personal Insolvency unit. The collection of dividends due for a Debt Settlement Arrangement (DSA) or Personal Insolvency Arrangement (PIA). The minimum information requirements needed before Revenue will consider a DSA. Information on Capital Acquisitions Tax.

The Tax and Duty Manual covering the EU Minimum Taxation Directive has been updated to reflect Finance Act 2024. The changes include the following: The application of rules relating to deferred tax and the approaches which a constituent entity may use to track deferred tax. These include details on an order of utilisation rule in relation to a loss deferred tax asset. The allocation of certain covered taxes to a constituent entity that is a hybrid entity or a reverse hybrid entity, and to allow for an election to exclude the allocation of certain deferred tax expenses and benefits to a jurisdiction. Updates with respect to the transitional CbCR safe harbour, including anti-avoidance provisions with respect to “hybrid arbitrage arrangements”. Rules to be used by eligible groups for non-material constituent entities to be applied under the “Simplified Calculations Safe Harbour”. Standalone investment undertakings, as defined, shall not be chargeable to the domestic top-up tax. The domestic top-up tax liability in respect of a securitisation entity can be imposed on another constituent entity of the multinational group or, in certain circumstances, on the securitisation entity itself. Clarifications on the operation of the provision relating to the calculation of domestic top-up tax. Other amendments have been reflected throughout the manual to ensure that the Pillar Two legislation operates as intended. The appendix has been updated to reflect all relevant references.

Revenue has updated its guidelines on Capital Acquisitions Tax Collection and Enforcement to include additional information and guidance. A new table has been included outlining the current capital acquisitions tax (CAT) thresholds and further details on CAT online payment options have been included in the appendix. The manual reflects the increase in the flat-rate addition for farmers from 4.8 percent to 5.1 percent with effect from 1 January 2025 and the separate interest rates applying where phased payment arrangements are entered into in relation to agricultural and or business property. References to a voluntary judgment mortgage have been removed from the manual.

Revenue has updated its guidance on Employer Provided Vehicles to reflect Finance Act 2024. A benefit-in-kind (BIK) exemption is available for the installation of a battery electric vehicle home charger by an employer at a director or an employee’s private residence. Certain conditions must be satisfied to avail of this exemption, including a condition that the employer must retain ownership of the charging facility. Any amounts paid by the employer for the maintenance of the qualifying charging facility will also be exempt provided all the conditions are met. Finance Act 2024 provides for the following temporary measures, to be used when calculating the BIK amount on employer provided vehicles, to be extended to apply for the tax year 2025: A reduction of €10,000 to the original market value (OMV) for all vans, electric vehicles and certain cars, and A reduction of 4,000 kilometres to the highest mileage band, reducing it from 52,001 kilometres to 48,001 kilometres. The manual includes refreshed and updated examples which aim to provide additional guidance.

The deadline for filing the annual share scheme returns for 2024 due by employers and trustees operating share schemes is 31 March 2025. The relevant forms include Form ESA, Form RSS1, Form KEEP1, Form ESS1, Form SRSO1 and Form ESOT1. New versions of the forms are now available which incorporate changes relating to accessibility details, penalties, and the number of line entries. The new forms and information on the filing obligations are available on Revenue’s share reporting obligations webpage.