IRISH FINANCE BILL 2024 IS PUBLISHED
The Finance Bill 2024 was published on 10 October 2024 and, with the likelihood of a general election in November, it is expected that it will progress quickly through the legislative process so that the Finance Act 2024 will be enacted before the current government is dissolved. The Budget contains a number of key business taxation measures and changes to existing legislative provisions. In our recent Briefing: Highlights from Irish Finance Bill 2024, we highlight the key elements of the Bill, including the introduction of the long-awaited participation exemption, changes to Irish Pillar Two legislation, and the introduction of Pillar One Amount B transfer pricing simplification.
IRELAND INTRODUCES A PARTICIPATION EXEMPTION FOR FOREIGN DIVIDENDS AND DISTRIBUTIONS
After a lengthy consultation process, the legislation for the Irish participation exemption has been included in the Finance Bill 2024. Arthur Cox LLP actively engaged with the Department of Finance and the Irish Revenue Commissioners (Revenue) on the new Irish legislation and welcomes its introduction. For more, see our recent Briefing: Ireland introduces a participation exemption for foreign distributions.
THE COURT OF JUSTICE OF THE EUROPEAN UNION (CJEU) ISSUES FINAL JUDGMENT IN FAVOUR OF THE EU COMMISSION IN APPLE TAX CASE
On 10 September 2024, the CJEU, sitting as the Grand Chamber, handed down its judgment setting aside the judgment of the lower General Court, upholding the Commission Decision in full and giving final judgment on the matter with no remittance back to the General Court or right of appeal. For more details and analysis of the judgment, see our Briefing: The CJEU draws a line under the Apple State aid saga.
COUNCIL OF THE EU REACHES AGREEMENT ON THE FASTER DIRECTIVE
The EU Directive on Faster and Safer Relief of Excess Withholding Taxes (the FASTER Directive) was approved at the May meeting of the EU Council of Economic and Financial Affairs. The new rules for simplified and faster relief from withholding tax on dividends and interest from publicly traded instruments will be operative from 1 January 2030. More details are available in our Briefing: Council of the EU reaches agreement on the FASTER Directive.
FIRST TRANSFER PRICING DETERMINATION ISSUED BY IRISH TAX APPEALS COMMISSION
The Irish Tax Appeals Commission has issued the first Determination to consider transfer pricing adjustments in Ireland. Revenue sought to adjust fees chargeable pursuant to an inter-company services agreement for the provision of services by an Irish subsidiary to its non-Irish parent, a software development company. Revenue did not dispute the transfer pricing method chosen (TNMM), nor the tested party being the Irish subsidiary, nor the profit level indicator being net costs plus. They did, however, assert that the cost of the share-based awards provided by the parent to certain staff of the Irish subsidiary should be included in the cost base of the Irish subsidiary for the purposes of calculating the mark-up. No recharge arrangement was in place. The Appeal Commissioner conducted a thorough examination of the OECD Guidelines and found in favour of the taxpayer, holding that the share-based awards were correctly excluded by the taxpayer as it did not bear any of the economic costs or risks, which were in fact borne by the parent company.
PUBLICATION OF NEW REVENUE GUIDELINES FOR DETERMINING EMPLOYMENT STATUS FOR TAXATION PURPOSES
Revenue published updated Guidelines for Determining Employment Status for Taxation Purposes (the Guidelines) in light of the Irish Supreme Court judgment in the case of Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino's Pizza [2023] IESC 24. The Guidelines set out the key elements of the judgment and its implications for businesses engaging employees, workers, contractors, or sub-contractors. For more information on the Guidelines, please see our Briefing: Revenue Issues New Guidance on Determining Employment Status for Tax Purposes.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
