The CCAB-I wrote to Minister Donohoe last month to make another appeal for changes to the Finance Bill. The CCAB-I alerted Minister Donohoe to the growing concern in the Irish business community on the impact of transfer pricing law changes set out under Finance Bill 2020. The CCAB-I also requested for Minister Donohoe to extend eligibility of the Covid Restriction Support Scheme to businesses which supply services and goods to businesses impacted by COVID-19 restrictions. It was also restated that the removal of the payment of interest to taxpayers as set out in Section 67 of the Bill undermines the taxpayer’s position compared to Revenue on participating in the tax appeals process, and it called for this change to be reversed before the Bill is enacted into law.

The CCAB-I wrote to Minister Donohoe on 2 November setting out key issues to be remedied before Finance Bill 2020 becomes law. The CCAB-I’s email to Minister Donohoe on Committee Stage amendments is as follows:

From: Norah Collender

Sent: Tuesday 17 November 2020 08:52

Subject: Matters for reconsideration on Committee Stage Amendments

Minister for Finance’s proposals for Committee Stage Amendments to Finance Bill 2020

Dear Minister

On behalf of the CCAB-I, I wish to make you aware of the growing concern in the Irish business community on the impact of transfer pricing law changes set out under Finance Bill 2020. These concerns are not abated on the recent publication of Committee Stage amendments proposed for Section 15 of the Bill. The change to the domestic exemption provisions to transfer pricing will have a substantially negative impact on Irish group companies at a time when they are experiencing economic challenges brought about by Brexit and Covid-19.

The rules as proposed will mean many Irish groups will be prevented from entering into common and routine intragroup transactions such as intercompany lending, the provision of Irish property and the provision of guarantees over liabilities, where no tax avoidance is at play, without incurring increased tax liabilities. The Bill’s proposals are disproportionate to the aim of achieving parity with transfer pricing rules in EU Member States, as when compared to other EU jurisdictions, the Irish rules will be more restrictive. In particular these rules will hurt the SME sector when the Ministerial Order to bring small companies within the terms of transfer pricing rules is enacted.

Please reconsider Section 15 of the Bill in its current form and delay further legislative progress until a consultation has taken place between stakeholders such as the Irish businesses we represent and the Department of Finance and Revenue.

The removal of the payment of interest to taxpayers as set out in Section 67 of the Bill is also troubling to accountants supporting taxpayers in the tax appeals process. We note that no amendments were proposed by you for Committee Stage Amendment to this section of the Bill. As Section 67 will undermine the taxpayer’s position compared to Revenue on participating in the tax appeals process, we ask that this change be reversed before the Bill is enacted into law.

Committee Stage Amendments proposed by you to Section 11 of the Bill do not address the key obstacle for taxpayers in accessing the Covid Restrictions Support Scheme (CRSS). We as accountants have the unpleasant task of explaining to businesses severely impacted by the Government’s Covid-19 restrictions that they cannot benefit from the supports set out in the CRSS due to the condition that their premises should restrict public access. The Government has risen to the challenge of making necessary refinements to COVID-19 tax supports where a particular sector is unfairly excluded, and we ask you Minister to please exercise flexibility again by allowing all businesses impacted by the Covid-19 restrictions access to CRSS where their turnover is 25 percent or less than turnover before Covid-19 restrictions were introduced.

If you require any further information on these matters, please contact us.

Yours sincerely

Norah Collender

Professional Tax Leader

Chartered Accountants Ireland