18 January 2019
PAYE modernisation update
At a meeting this week, Revenue confirmed that over 119,000 employers submitted payroll reports in the first two weeks of January, covering 1.5 million employees. Revenue also provided an update on some common errors and queries raised with the Employer Helpline. We have included Revenue’s slides on “common errors” (http://taxinstitute.ie/Portals/0/Tax%20Policy/Pmod%20meeting%2014%20Jan%202019%20-common%20errors.pdf), as members may find this information helpful over the weeks ahead. Revenue’s PAYE modernisation Hot Topics webpage (https://www.revenue.ie/en/employing-people/paye-modernisation/hot-topics/index.aspx) will be updated on an ongoing basis with the most common issues raised by employers.
Revenue will be developing guidance for employees on the new regime. Information resources already available include:
- PAYE modernisation for employees (https://www.revenue.ie/en/jobs-and-pensions/paye-modernisation-for-employees/index.aspx).
- The Jobs and Pensions webpage (https://www.revenue.ie/en/jobs-and-pensions/index.aspx), which covers topics of general interest to employees; including emergency tax, claiming a refund, splitting credits between two jobs, and a User Manual (https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-42/42-04-64.pdf)on the Jobs and Pensions service.
This week, Revenue also updated a Manual PAYE Reviews where Week 53 applies, to reflect Finance Act 2018 amendments. Finance Act 2018 introduced provisions to ensure that employees who are paid on a weekly or fortnightly basis and have an additional pay-day in a tax year (i.e. a “Week 53” pay-day), will not have an underpayment of tax when their liability is reviewed following the end of the tax year.
Read the Manual - https://www.revenue.ie/en/tax-professionals/ebrief/2019/no-0082019.aspx
Finance Act 2018 amendments to Stock Relief provisions
Revenue’s Manuals on General Stock Relief and Enhanced Stock Relief for young trained farmers and farmers in Registered Farm Partnerships have been updated to take account of amendments in Finance Act 2018. Finance Act 2018 extended Stock Relief to 31 December 2021 and provided for a ceiling of €70,000 on the amount of aid, which may be granted to certain young trained farmers, to reflect EU State Aid rules.
Read the eBrief - https://www.revenue.ie/en/tax-professionals/ebrief/2019/no-0072019.aspx
New Manual on Stamp Duty – administrative procedures and enforcement
A new Manual Stamp Duty on Instruments - Administrative Procedures and Enforcement, has been created. It contains information on the eStamping system and related enforcement procedures.
Read the Manual - https://www.revenue.ie/en/tax-professionals/ebrief/2019/no-0062019.aspx
Changes to the Generalised System of Preferences country lists
Changes to the Generalised System of Preferences (GSP) came into effect on 1 January 2019. Revenue’s Customs Manual on Preferential Origin – Appendix 2 has been updated accordingly.
Commission publishes a communication on unanimity in tax matters
On 15 January, the European Commission issued a communication which proposes the extension of qualified majority voting to all EU tax policies. The communication suggests a progressive approach to phase out the unanimity rule on matters of taxation by the end of 2025 and replace the current unanimity rule with Qualified Majority Voting (QMV). Under QMV, the European Parliament and EU Council are co-legislators on an equal footing and a minimum of sixteen Member States, representing at least 65% of the EU population, must vote in favour of the legislation.
The communication issued by the Commission sets out a suggested four-phased process for transition from the current unanimity rule to QMV in the area of tax matters. The change to QMV would be on the basis of the so-called “passerelle clause”, which requires unanimous consent from the Member States and agreement by national parliaments.
In response to the Commission’s publication, a spokeswoman for the Minister for Finance, Public Expenditure and Reform, Paschal Donohoe, TD stated “taxation is a sovereign member state competence and decisions at [European] Council on tax matters require unanimity.” “Ireland does not support any change being made on how tax issues are agreed at EU level.”
Read the comments in the media - https://www.irishtimes.com/business/economy/ireland-rejects-brussels-plan-to-kill-national-vetoes-on-tax-1.3759027
Read the Commission's communication - https://ec.europa.eu/taxation_customs/taxation/decision-making-eu-tax-policy_en
Netherlands publishes a “low-tax” jurisdiction list for anti-tax avoidance measures
The Netherlands has published a list of “low tax” jurisdictions. The list consists of the five jurisdictions that are currently on the EU list of non-cooperative jurisdictions for tax purposes and 16 other jurisdictions the Dutch Government considers are “low-tax” jurisdictions. These are jurisdictions that either do not tax profits, or jurisdictions that tax profits against a rate that is lower than 9%. The list of countries are; Guam, Samoa, Trinidad and Tobago and the US Virgin Islands, Anguilla, the Bahamas, Bahrain, Belize, Bermuda, the British Virgin Islands, Guernsey, the Isle of Man, Jersey, the Cayman Islands, Kuwait, Qatar, Saudi Arabia, the Turks and Caicos Islands, Vanuatu and the United Arab Emirates.
Countries on the list will be subject to new national anti-tax avoidance measures. These include measures relating to controlled foreign companies, a conditional withholding tax on interest and royalties from 1 January 2021 and restrictions on the ability to obtain rulings from the Dutch Tax and Customs Administration.
Belize joins the Inclusive Framework on BEPS
Belize has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, becoming the 86th jurisdiction to join the Convention. In addition, Monaco deposited its instrument of ratification for the Convention with the OECD.
OECD publishes report on corporate tax statistics
According to a new report from the OECD, Corporate Tax Statistics, taxes paid by companies remain a key source of government revenues, especially in developing countries, despite the worldwide trend of falling corporate tax rates over the past two decades. The report provides internationally comparable statistics and analysis from around 100 countries worldwide on four main categories of data: corporate tax revenues, statutory corporate income tax (CIT) rates, corporate effective tax rates and tax incentives related to innovation. In 2016, corporate tax revenues accounted for 13.3% of total tax revenues on average across the 88 jurisdictions for which data is available increasing from 12% in 2000.
The report also shows a clear trend of falling statutory corporate tax rates over the last two decades. The database shows that the average combined statutory tax rate fell from 28.6% in 2000 to 21.4% in 2018. Comparing statutory corporate tax rates between 2000 and 2018, 76 jurisdictions had lower tax rates in 2018, 12 jurisdictions had the same tax rate, and only six had higher tax rates. In 2018, 12 jurisdictions had no corporate tax regime or a corporate income tax rate of zero.
OECD Tax Talks - webcast on 29 January
Experts from the OECD’s Centre for Tax Policy and Administration are hosting a live webcast on 29 January at 3pm to discuss a number of recent and upcoming developments in the OECD's international tax work.
Register for the webcast - http://www.oecd.org/tax/tax-talks-webcasts.htm