This country-specific Q&A provides an overview of tax laws and regulations applicable in Ireland.
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1. How often is tax law amended and what are the processes for such amendments?
In December each year an annual Finance Act is passed by the Irish Parliament enacting substantive changes to tax law. This follows a budget statement by the Minister for Finance in October and a number of weeks of parliamentary debate and amendments. Very rarely, there may be more than one Finance Act in a calendar year.
Implementing legislation for relevant EU Directives is usually passed as part of the annual Finance Act. Other implementing legislation (regulations or orders) may be issued at other times throughout the year where authorized under the primary Finance Act.
Substantive changes to tax law are typically preceded by a period of public consultation and draft legislation may be released in advance for public comment and debate.
Procedural or administrative changes to Irish Revenue Commissioners' practices issue regularly throughout the year.
2. What are the principal procedural obligations of a taxpayer, that is, the maintenance of records over what period and how regularly must it file a return or accounts?
Companies are obliged to file a corporation tax return annually, typically 8 months and 21 days after the company's financial year end. This can be 8 months and 23 days if the return is filed electronically. Individuals, with employment income only, typically have no personal income tax filing obligations as their tax obligations are fulfilled by their employer under a system of payroll withholding taxes. Individuals with other sources of income file a tax return annually on 31 October (extension available for online filing).
There are bimonthly and annual VAT filings and employers have monthly and annual payroll withholding tax filings.
Taxpayers are obliged to maintain adequate books and records to support a tax filing for a period of six years. This time period is extended where there is an ongoing inquiry or audit.
3. Who are the key regulatory authorities? How easy is it to deal with them and how long does it take to resolve standard issues?
The Office of the Revenue Commissioners was established by Government Order in 1923 with responsibility for collecting taxes and duties and implementing customs controls. The Order provided for a Board of Commissioners comprising three Commissioners, one of whom is appointed Chairman. Irish Revenue's structure is designed around its customer base. Irish Revenue Regions are responsible for customers within their geographical area, except for those large corporates and high wealth individuals dealt with by the Large Cases Division.
There are also Divisions with responsibility for policy, legislation and interpretation functions. In total, Irish Revenue comprises of 16 Divisions each of which is headed by an Assistant Secretary.
Standard queries are normally dealt with through an online portal. Depending on the nature of the query, response times can vary from 2 days to 6 weeks or even longer in complex matters. Complex matters may be dealt with face to face with the relevant technical division in Irish Revenue. Large taxpayers may be invited to join the Irish Revenue's Co-operative Compliance Framework ("CCF"). Taxpayers within the CCF have direct access to an Irish Revenue official and can expect matters to be dealt with more quickly. The CCF is entirely voluntary. However, taxpayers who do not participate in the CCF will not have a dedicated case manager and instead will be required to route queries or submissions to the Irish Revenue Commissioners through the general customer service team. This can result in increased delays with regard to queries being addressed or answered.
4. Are tax disputes capable of adjudication by a court, tribunal or body independent of the tax authority, and how long should a taxpayer expect such proceedings to take?
The first instance independent tribunal for tax disputes is the Tax Appeals Commissioners ("TAC"). There is currently a significant waiting list of cases before the TAC and typical waiting time to hear an appeal can be more than one year. As of 22 March 2019, the TAC had 3,566 active appeals under its remit.
Appeals on points of law from the TAC may be made through the regular court system in the High Court, Court of Appeal and ultimately the Supreme Court (where the Supreme Court decides to exercise its appellate jurisdiction in circumstances specified by the Constitution). Appeals through the courts system can be expected to take more than 5 years.
5. Are there set dates for payment of tax, provisionally or in arrears, and what happens with amounts of tax in dispute with the regulatory authority?
Individuals who have an income tax filing obligation must pay preliminary tax for a calendar year by 31 October of that year. To avoid possible interest charges the payment must be 90% of the current year liability or 100% of the prior year liability. Any balancing tax payment in respect of a calendar year must be paid by 31 October of the following calendar year.
Companies generally pay corporation tax in three installments: (i) on the 21st day of the sixth month of the current financial year a payment equal to 45% of the current year tax liability (or 50% of the preceding year tax liability); (ii) on the 21st day of the eleventh month of the current financial year a payment to bring the total payments for the year to 90% of the current year tax liability; (iii) on the 21st day of the ninth month following the relevant financial year (along with the corporation tax filing) a balancing payment of the remaining 10% of the relevant financial year liability.
VAT and payroll withholding tax payments are made either bimonthly or monthly in arrears along with the relevant filing.
In order to lodge an appeal the taxpayer must pay the tax that the taxpayer believes is due. There is no requirement to pay the disputed amount. However if there is an additional tax liability following the determination of an appeal the additional amount becomes due and payable from the original due date of the disputed amount.
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Originally published by The Legal 500
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.