Revenue Note for Guidance

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Revenue Note for Guidance

Schedule 18

[Section 734(5)]

Accounting for and Payment of Tax Deducted from Relevant Payments and Undistributed Relevant Income

Overview

This Schedule sets out the framework for returns and payments of appropriate tax by collective investment undertakings (CIU’s) and provides that, in general, existing provisions for the assessment and collection of income tax, and for the charge of interest on overdue tax, apply, with suitable modification, to appropriate tax. The Schedule provides specifically that appropriate tax is to be payable without the necessity for raising an assessment, but provision is made to empower an inspector to raise an assessment if payment is delayed, or if it is considered necessary to do so because of dissatisfaction with the particulars contained in a return.

Time and manner of payment

par 1(1) The collection and recovery of appropriate tax deducted in accordance with section 734(5) is governed by this paragraph.

A CIU must make annual returns to the Collector-General for each year ending on 5 April (with effect from 5 April, 1990 onwards) of —

  • relevant payments made by it in the year,
  • undistributed relevant income, and
  • the appropriate tax at the prevailing standard rate of income tax deductible therefrom.

par 1(2) The return is to be made within 15 days from 5 April. Even if an undertaking fails to deduct tax from a payment, it is nonetheless obliged to account in the end-of-year return for the amount of the appropriate tax relating to that payment.

par 1(3) The appropriate tax should be paid to the Collector-General within 15 days of the 5th of April (the return date). The tax is payable without the making of an assessment but, for the purposes of securing collection of the tax or any interest on such tax, an assessment may be made by the inspector if the appropriate tax, or any part of that tax, due for the year is not paid on time.

par 1(4) The inspector can make an estimated assessment where a CIU has not made a return, or has made an inadequate return, or has made a return with which the inspector is dissatisfied. The due date for any tax contained in such an assessment is, for the purposes of interest on unpaid tax, the date on which the tax should have been paid without the making of an assessment if a correct return were made in due time.

par 1(5) There is a provision to make any appropriate adjustments to the tax liabilities of a CIU (and, if necessary, of a unit holder) where a return contains incorrect information. For example, the CIU might erroneously indicate in a return that appropriate tax was deducted from a payment made to a non-resident unit holder.

par 1(6)(a) While, normally, appropriate tax is due and payable without the making of an assessment, the due date for appropriate tax contained in an assessment (if any assessment must be made) is one month after the issue of the notice of assessment. However, that due date cannot displace an earlier due date which would have been applicable under subparagraph (3). If the assessment is appealed, the appropriate earlier due date continues to apply.

par 1(6)(b) Any tax overpaid on determination of an appeal against such an assessment is to be repaid.

par 1(7)(a) The income tax provisions relating to assessment, appeals and collection (including, for example, provisions relating to interest on tax) are applied to appropriate tax.

par 1(7)(b) Interest is due on late payment of appropriate tax which is payable under subparagraph (3) without the making of an assessment. Assessed appropriate tax is subject to the normal interest provisions applying to assessed taxes.

par 1(7)(c) Certain payment and procedural provisions of section 1080 which apply to interest on assessed taxes, are applied to interest payable on appropriate tax which is payable without the making of an assessment.

par 1(7)(d) Where appropriate tax is charged by assessment so that the normal provisions providing for an interest charge apply under section 1080, that section is adapted for this purpose by the deletion of subsection (1)(b).

par 1(8) Returns are to be made on a Revenue approved form and incorporates a declaration which must be made to the effect that the return is correct and complete.

Statement to be given on making of relevant payment

par 2 A unit holder is assessed to tax in respect of a payment from a collective investment undertaking as if the unit holder has got the payment directly. To enable this to happen the undertaking must give the unit holder a certificate which shows —

  • the gross amount of the payment,
  • the amount of any appropriate tax or other Irish tax deducted from the profits out of which the payment is made,
  • the net amount of the payment,
  • the date of the payment, and
  • any other information which will assist the unit holder in paying his or her correct tax or getting a refund (such information could include an analysis between income and capital payments; and foreign tax paid).

Relevant Date: Finance Act 2020