Economic Spring Statement
This week Minister for Finance Michael Noonan delivered the Spring Statement to much fanfare. While the statement was full of positive intentions such as reduced Income Tax Rates, lower Interest Rates, boosted employment and investment in childcare, education and health, it was very low on specific detail. Minister Noonan did say that income tax rates would be reduced in 2016, 2017 and 2018. The Taoiseach confirmed USC rates would reduce in the next budget for people on salaries below €70,000, we were expecting more detail than this.
Fianna Fáil and the other parties have recently come out with claims that, if elected, they would abolish the USC, abolish water charges, give tax credits for childcare costs and give the PAYE tax credit to the self-employed among other reliefs. Unfortunately we will have to wait for the October budget to see more details from the current government.
The often forgotten form that Revenue request businesses to complete and file is making a comeback. A Form 46G must include details of services which a business pays for in excess of €6,000 (fees for accountantancy, legal, consultantancy services amongest others). The details must be submitted to Revenue at the same time as a company’s tax return or a sole traders income tax return. The nature of the service, amount of consideration paid, name & tax reference number of the payee and details of any VAT charged on amounts paid are the details required to be submitted to Revenue. We are finding recently that Revenue are withholding refunds on the basis that these returns have not been filed. Please contact Quintas if you require assistance with the completion of this form.
There are major changes coming on the 1st June 2015 in relation to company law. These changes will affect every company in Ireland. One such change is that more responsibilities will be put on directors, however on the plus side the number of directors required by a company has been reduced to 1. There will undoubtedly be many companies who will take advantage of this and in many cases rightly so. I would however stress that it is vital that you speak to your tax advisor before resigning directors as it may have adverse consequences on claiming some tax reliefs. We will be sending out a more detailed review of the legislation in due course, however just be mindful of the changes that are coming.
VAT on Telecommunications, Broadcasting & Electronic Services
Changes to the VAT system for the supply of Telecommunications, Broadcasting and Electronic services to non-taxable people in the EU came into effect on 1st January 2015. Now the place of supply when a business is supplying one of the above services to a non-taxable customer is where the customer resides. Pre 2015 the service would have been subject to Irish VAT. This effectively means that the supplier must register and account for VAT in each EU country in which its making supplies. Revenue have introduced a simplified system called MOSS, which allows you to pay over the VAT in each country without having to physically register for VAT in each country. If you feel your business is affected by these changes please contact your advisors.