Revenue Tax Briefing

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Revenue Tax Briefing Issue 53, August 2003

Professional Services Withholding Tax FA 2003

Amendment of Chapter 1 (Payments in Respect of Professional Services By Certain Persons) Part 18 and Schedule 13 TCA 1997

This article deals with amendments to the legislative provisions governing Professional Services Withholding Tax in the Finance Act 2003 including:

  • Additions and amendments to Schedule 13 (list of accountable persons authorised to operate Professional Services Withholding Tax.)
  • Amendment to the definition of Relevant Payment
  • Introduction of provisions to raise assessments on accountable persons
  • Extension of audit powers to include audits of accountable persons.

Section 10 FA 2003 relates to the Professional Services Withholding Tax scheme, which provides for the deduction of income tax at the standard rate by accountable persons (Government Departments, Local Authorities, Semi-State Bodies etc.) when making payments for professional services to individuals and companies.

The current statutory list of accountable persons, set out in Schedule 13 TCA 1997, has been amended to take account of 19 bodies who are authorised to deduct Professional Services Withholding Tax from payments for professional services, with effect from 1 May 2003. These have been added to the list as follows:

121. Human Rights Commission.

122. Pensions Ombudsman.

123. Refugee Appeals Tribunal.

124. The Dublin Institute for Advanced Studies.

125. Pre-Hospital Emergency Care Council.

126. Sustainable Energy Ireland - The Sustainable Energy Authority of Ireland.

127. The Health Insurance Authority.

128. Commission for Aviation Regulation.

129. Railway Procurement Agency.

130. The National Council on Ageing and Older People

131. National Qualifications Authority of Ireland (NQAI).

132. BreastCheck, The National Breast Screening Programme.

133. The National Council for the Professional Development of Nursing and Midwifery.

134. Mater and Children’s Hospital Development Ltd.

135. The National Consultative Commission on Racism and Interculturalism.

136. Office of Tobacco Control.

137. The Marine Casualty Investigation Board.

138. National Treasury Management Agency as regards the performance of functions by it conferred on, or delegated to, it by or under Part 2, National Treasury Management Agency (Amendment) Act 2000. (State Claims Agency).

139. National Development Finance Agency

In addition to the above, two further amendments have been made to Schedule 13 as follows:

  • The removal of one body -
    The National Pensions Reserve Fund Commission
  • A change of name in another
    Horse Racing Ireland, formerly: The Irish Horseracing Authority.

Section 10 FA 2003 amends the definition of relevant payment to exclude a payment made by one accountable person to another in reimbursement of a relevant payment.

Also, the Revenue Commissioners are now empowered to raise assessments on accountable persons, if such persons either refuse or neglect to pay over professional services withholding tax to the Revenue Commissioners.

Finally, Section 159 FA 2003, extended the Revenue Commissioners powers of inspection, with the introduction of Section 904J TCA 1997, thus enabling the Revenue Commissioners to carry out on-site audits of accountable persons.