Dealing with Revenue’s Level 1 Interventions Correctly

For businesses operating in Ireland, it is crucial to understand how to effectively handle Level 1 interventions initiated by Revenue. It has recently been announced by Revenue that many businesses are failing to deal with these in the correct manner, which can become problematic for both Revenue and the businesses themselves.

Level 1 interventions are preliminary inquiries that Revenue conducts in order to ensure compliance with tax obligations. This is another effort by Revenue to clamp down on non-compliance and usually takes the form of requests for information, clarification or documents. These requests can be randomly selected, and do not necessarily indicate any discrepancies being found in your information.

Here, we will run through the most important tips for dealing with Level 1 interventions correctly.

  1. Prompt Response:
    Timing is crucial in terms of Level 1 Interventions. Revenue set specific deadlines to avoid potential penalties or the escalation of the issue, which both parties will want to avoid.
  2. Understanding:
    Reading the communication from Revenue in detail is vital. Ensure that you fully understand the requests being made of you, before beginning your data gathering or response.
  3. Professional Advice:
    If you are unsure of how to respond, there are a great number of professional entities who are qualified and happy to assist you in order to ensure compliance. EcovisDCA being just one of these.
  4. Double Check Information:
    We would always advise clients to double and triple check the information before sending it on to Revenue, as any discrepancies will be picked up on and may cause issues down the line.
  5. Honesty is the Best Policy:
    In the event of a delay in your data gathering, we would always advise that Revenue be informed ASAP in order to inform them of the issue and to request an extension of the deadline if needed.
  6. Evidence:
    Always keep copies of all documents issued as well as your correspondence with Revenue. In the event of any issues, it is always wise to have a paper trail to look back on.

Dealing with these interventions may seem like a time-consuming and difficult task, but by employing the tactics listed above, you can condense the experience into a manageable task which can be completed with ease.

Benefits of Establishing a Holding Company in Ireland

Ireland is renowned as an attractive location for groups/companies looking to set up holding company structures due to its competitive tax regime and favourable business environment. Ireland is usually the location of choice for businesses seeking to minimise their tax liability while setting up or expanding their operations in Europe. This has become even more prevalent post Brexit.

We set out below the main benefits of setting up such a structure and operating in Ireland.

  • Dividends received by Irish resident companies from Irish resident companies are exempt from taxes – withholding and corporate.
  • Foreign dividend income received by Irish resident companies from trading subsidiaries in either an EU member state or a country with which Ireland has concluded a double tax treaty, and where that dividend has been paid out of trading profits, is taxed at the 12.5% trading rate of corporation tax.
  • A system of foreign tax credits exist so that, with appropriate planning, it may be possible to ensure that no Irish tax arises on foreign dividends received.
  • Favourable tax and capital allowances regimes relating to Research & Development and intellectual property.
  • Group structure benefits – transfer of assets within an EU Group, surrender and claims of losses, where relevant, cross charges, among others.
  • Access to a skilled workforce/manpower.
  • Stable economic climate as well as transparent legal and regulatory frameworks.
  • CGT exemption (Participation relief) on qualifying subsidiary disposals (domestic and foreign). The exemption will apply to the disposal of shares in trading companies where the companies are resident in an EU member state or in countries with which Ireland has concluded a double taxation agreement – see above.

The above features, coupled with Ireland’s investment friendly policies make it an ideal location for companies seeking to enhance their financial efficiency and presence in the EU.

Our team can provide you with comprehensive advice on the establishment of a holding company in Ireland, including tax implications, regulatory compliance, and other legal requirements.