February 2020 Tax Newsletter

This series of articles will provide you with an update on tax developments that impact organisations in Ireland and those that do business with Ireland.

2020 – The Reshaping of Ireland’s Transfer Pricing Regime

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The Irish Finance Act 2019 (‘the Finance Act 2019’) was signed on 22 December 2019 and has introduced new laws that will reshape Ireland’s Transfer Pricing Regime. The Finance Act has embraced the latest international tax standards which have resulted in a dramatic change in Irish tax law from 1 January 2020.

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Legislation changes and Revenue clarifications impacting Irish companies

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There have been recent changes to Ireland’s dividend withholding regime, with the rate of withholding having increased to 25% with effect from 1 January 2020. The rate of dividend withholding tax is to be brought into line with the individual shareholder’s marginal tax rate from 1 January 2021. Revenue have also released updated guidance on the tax treatment of accruals and provisions made for financial statement purposes.

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R&D Subcontractors

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Changes brought about under Finance Act 2019 to the new upfront notification requirement is likely to cause administrative challenges. Companies should keep records of notifications sent in the event of a Revenue audit.

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Dividend Withholding Tax (DWT) - Real -Time Reporting

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A significant reform of the Irish Dividend Withholding Tax (DWT) regime came into effect on 1 January 2020. Further changes effective from 1 January 2021 have also been announced. These changes represent significant reform of the DWT regime and will impact on those paying and receiving dividends from Irish companies.

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Annual employer reporting for share incentive plans

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Employers who operate share-based reward plans have an obligation to submit an annual return to Revenue providing details of certain share awards in the previous year.

Failure to submit the appropriate form can result in a penalty for the employer.

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Irish tax treatment of professional subscriptions

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Revenue has published an update to previously issued guidance on the tax treatment of professional subscriptions paid or reimbursed on behalf of an employee.

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Update to Irish PAYE obligations for foreign employers

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Revenue has recently published an update about the PAYE treatment of foreign employments carried out in Ireland.

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Artists’ Exemption - €50,000 Tax Free

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If you are an artist, you may be entitled to tax relief on profits up to a maximum of €50,000 per annum.

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Tax Relief on Medical Expenses

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We examine what medical expenses qualify for tax relief and how an individual can claim the different types of medical expenses.

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OVERVIEW OF THE UK POSITION POST BREXIT

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The UK formally left the EU, on 31 January 2020. This did not result in any immediate seismic events resulting from the UK’s exit from the EU. For now, there is no significant change in how UK businesses account for VAT on trading with the EU. The reason for this is that the UK has now entered in to an agreed transition period where, for trade purposes, the UK will remain part of the EU until 31 December 2020.

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European Council adopts simplified rules for small businesses

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The Council adopted simplified VAT rules applicable to small businesses on Feb 18, 2020. The purpose of the new measures is to reduce the administrative burden and compliance costs for small enterprises and create a fiscal environment which will help small enterprises grow and trade across borders more efficiently.

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VAT Update

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• Post Brexit, looking to Europe and the 4 Quick Fixes go live
• VAT status around Airbnb letting activity and emergency accommodation
• Updates on Charity VAT Compensation Scheme

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