The relief commonly known as Special Assignee Relief Programme (SARP) provides for income tax relief on a proportion of income earned by certain employees who are assigned to work in the State. Section 825C (Special Assignee Relief Programme) of the Taxes Consolidation Act 1997 (TCA 1997) refers. Section 15 of Finance Act 2014 extended SARP to include individuals assigned to work in the State during any of the tax years 2015, 2016 and 2017 and also amended some aspects of the relief. The Tax and Duty manual Part 34.00.10 (PDF, 175KB) has been revised to take account of the amendments made by the Finance Act 2014.
Mandatory Disclosure guidelines published
Mandatory Disclosure rules impact on certain tax transactions relating to Income Tax, Corporation Tax, Capital Gains Tax, the Universal Social Charge, Value Added Tax, Capital Acquisitions Tax, Stamp Duties and Excise Duties.
Section 88 Finance Act 2014 introduced a number of amendments to the Mandatory Disclosure regime, which are effective for any transaction which is commenced after 23 October 2014. Following on from a public consultation (refer toe-Brief 99/14) Revenue has now published its amended Guidance Notes (774KB) on the mandatory disclosure regime.
The main changes made to the guidance notes, reflecting submissions received, are:
- clarification on the 'main benefit' test (paragraph 2.2.6)
- clarification on where the obligation to disclose rests where there is no promoter (paragraph 3.8.2)
- clarification around the new discretionary trust hallmark (paragraph 4.3.10)
- clarification on when a taxpayer is required to provide certain information in lieu of a transaction number (paragraph 5.3.1)
- clarifications around obligations to disclose and provide transaction numbers (paragraph 8.6 and 8.7)
- inclusion of additional examples, in Appendix 1, of what Revenue consider day-to-day tax planning
- inclusion of a number of additional items, in Appendix 2, which are not disclosable under certain specified descriptions.
Practitioners and taxpayers are reminded that, in relation to transactions that are commenced after 23 October, Revenue will treat any disclosures or information received by 31 January 2015 as having been received in a timely manner with the result that no penalties for late disclosure will apply.
Capital Gains Tax - Disposals by virtue or in consequence of separation, divorce or dissolution of civil partnerships and the remittance basis of Assessment
Section 29 TCA 1997 contains the general provisions regarding persons chargeable to Capital Gains Tax (CGT).
Section 29 TCA 1997 as amended by Section 45 Finance Act 2013 and Section 41 Finance (No. 2) Act 2013 counters a potential avoidance of CGT by a non-Irish domiciled individual transferring assets situated outside the State to his or her spouse or civil partner in order to avoid the remittance basis of assessment for CGT purposes.
Practitioners have enquired about the application of these provisions to disposals of assets situated outside the Statemade by individuals who are resident or ordinarily resident but non-domiciled in the State, by virtue or in consequence of a legal separation, divorce or dissolution of civil partnerships.
VAT Treatment of Employment Agencies and VAT Treatment of Home Care Services
VAT Treatment of Employment Agencies
The status of agency staff who are sourced, placed or made available by employment agencies is a matter of fact determined on the basis of contracts and/or the actual working and other arrangements that may exist from time to time between the staff, the agency and the company, firm, body or other entity in which the staff work, referred to below for convenience as the "organisation".
In accordance with Section 37(1) of the VAT Consolidation Act 2010, as amended, VAT is chargeable on the full consideration which the agency becomes entitled to receive in respect of or in relation to the supply of agency staff to the organisation, including all taxes, commissions, costs and charges whatsoever but not including VAT chargeable in respect of the supply. The relevant rate of VAT is the standard rate in force at the time of the supply (currently 23%).
Revenue has published updated Guidelines in relation to the Research and Development (R&D) Tax Credit provided for in Sections 766, 766A and 766B of the Taxes Consolidation Act 1997.
The Research and Development Tax credit is given in respect of expenditure incurred by companies in the carrying on of qualifying R&D activities as defined in s.766. The credit is given at 25% of qualifying expenditure.
The Guidelines (PDF, 1.07MB) have been updated and amended to take account of changes in the recent Finance Acts, to address certain areas of interpretation (in particular in relation to changes in group membership) and to provide more up-to-date examples of how to calculate the credit.
What is a PAYE Exclusion Order?
The obligation to deduct tax at source under the PAYE system from emoluments is a statutory obligation placed on employers and other persons paying emoluments by Section 985 of the Taxes Consolidation Act (TCA) 1997. A PAYE Exclusion Order issued by Revenue to an employer or other person paying emoluments, under Section 984 TCA, relieves that employer or other person from that obligation.
Non-resident employees who are recruited abroad and who exercise all their duties abroad
Some Irish resident employers carry on some or all of their trade or profession in foreign jurisdictions and recruit non-resident employees to work in the foreign jurisdiction. These employees generally reside locally in the area in which the trade or profession is being carried on and carry out all the duties of their employment in the foreign jurisdiction and never set foot in Ireland.
To obviate the necessity for such a non-resident employee to apply for a PPS number and for the employer to apply for an Exclusion Order under section 984 of the Taxes Consolidation Act 1997, Revenue is prepared to accept that the employer is released from the obligation to make the appropriate deductions under the PAYE system from the employee's remuneration in certain circumstances. Those circumstances are where the employee -
- is not resident in the State for tax purposes,
- has been recruited abroad,
- carries out all the duties of employment abroad,
- is not a director of the employer, and
- is outside the charge to tax in the State.
Paragraph 5.1A has been added to Revenue's PAYE - Exclusion Orders Manual (PDF, 172KB) - to reflect this position.
Companies are obliged to provide information to Revenue in relation to the grant, assignment or release of rights or the allotment of shares, or the transfer of any asset under rights granted in accordance with Section 128(11) Taxes Consolidation Act 1997.
Currently this information is provided on the Form RSS1.
Following the enactment of the Finance Act 2014 such information must be delivered in an electronic format approved by the Revenue Commissioners, not later than the 31 March in the year of assessment following the year in which any such event takes place.
To facilitate this requirement, an electronic version of the Form RSS1 is currently in development and will be made available to customers and agents in February 2015. This electronic version will be in spreadsheet format, tailored to capture the Form RSS1 information, and will make it easier and quicker to complete and submit the Form.
A further eBrief will issue when the electronic version of the Form RSS1 is available and will include detailed instructions and explanatory notes for customers and agents on the completion and filing of the electronic Form RSS1.
Qualifying small breweries (micro-breweries) that produced up to 20,000 hectolitres of beer in the previous year are eligible for relief of 50% of the standard rate of excise duty for beer.
Section 59 of Finance Act 2014 increases the production limit for qualifying microbreweries and the volume of beer on which they may claim the relief, from 20,000 hectolitres to 30,000 hectolitres per annum. Corresponding increases apply for qualifying co-operating micro-breweries.
The changes take effect on 1st January 2015 and allow qualifying micro-breweries and qualifying co-operating micro-breweries that produced up to 30,000 hectolitres of beer and up to 60,000 hectolitres of beer, respectively, in 2014 to avail of the relief.
The rate of relief will remain at 50% of the standard rate of excise duty for beer.
The Tax and Duty manual - Administration and Control of Tax Warehouses Manual; Part 2 Breweries, Microbreweries and Cider Manufacturers (700.8KB) - has been updated to reflect the change outlined above.