Revenue’s New ‘Digital Transaction’ Tax

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Tax for the Memories

Taxation is always a hot topic of conversation, particularly in recent months as Revenue have begun to clamp down on issues of taxation from non-filing and late filing to fraud. With Brexit continuing to cast a shadow of uncertainty over us here in Ireland, our focus moves more into Europe. Recently two new legislative proposals have been put forward by the EU Commission which could possibly have unforeseen consequences for Ireland.

These proposals relate to digital tax and aim to create a turnover-based tax in an attempt to provide both a long and short term solution for the treatment of digital tax transactions. Essentially, the proposals will involve a 3% tax on gross revenues of certain digital transactions based on the location of target customers, meaning that the targeted consumer area will be issued with a tax payment, creating a sort of symbiotic tax relationship between the country of origin and the country of consumption. An apparent win-win situation as both countries receive something positive whether a tax payment or the revenue from the endeavour itself.

To begin with, this will only apply to larger companies with turnover in excess of €750m worldwide, but it is hoped that in the longer term, these plans can apply to a wider range of companies. It has been suggested that the proposals are in direct contrast to the normal tax principles in that it applies to where customers are located as opposed to where the work actively takes place, and also doesn’t take into account whether the company is making any profits as it is generally based on gross revenues. It has also been suggested that it will be far more difficult to quantify as rather than the standard procedures, it will involve converting customer data and satisfaction into actual facts and figures for taxation purposes. This has been suggested as being somewhat damaging for the Irish market which has a long history of exporting. It has also been suggested that this could be damaging for Ireland as it somewhat diminished the value of our 12.5% tax rate as this digital tax becomes a cost for Irish companies. A reduction in the appeal of our tax rate could result in Ireland becoming a less attractive prospect.

It has also been suggested that these proposals could have adverse effects on competition and be economically damaging should these short term proposals be in place for longer than expected as a longer term solution is formulated. These proposals could potentially penalise smaller countries whilst rewarding larger, this would of course be damaging to Ireland. Perhaps the longer term solution will factor in the value both of the country of origin and the country of consumption, but both this and any adverse or positive effects remain to be seen.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Protect that Data

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In light of recent revelations in terms of personal data in the realm of social media, data protection issues have become more of a common topic of conversation. New changes this month will ensure that these issues stay a hot topic. In April 2016, after a lengthy period of debate and preparation, the General Data Protection Regulation (GDPR) was approved by the European Union Parliament. This new regulation is set to come into force on the 25th of May 2018 and any companies found to be non-compliant may face rather severe fines. With that in mind we want to ensure that all of our clients and friends are well informed so today we will be discussing the main topics of note ahead of this enforcement date.

In essence, the GDPR will replace the existing Data Protection Directive 95/46/EC and has been formulated in order to standardise data protection and privacy laws across Europe. The regulation is also intended to empower organisations to take data privacy increasingly seriously and to fully understand the impact this can have on a business.

Regardless of the location of your company, if you are an entity which offers goods, services or data exchanges to EU subjects then the GDPR will apply to your company. For our British neighbours, there exists a level of uncertainty with Brexit continuing to loom, for all businesses having dealings in data with the UK it would be advisable to apply the same rules to data coming to and from the UK as data staying within the EU. There will likely be legislation put in place which may stay in line with the GDPR but in order to avoid issues, it is advisable to treat non EU entities and their data in the same strict manner.

It is important for companies to make themselves aware of what actually constitutes personal data. In its most common form personal data is any information on an individual which could identify them. Anything from photos, bank details, addresses, certificates etc. can constitute as personal data for which there must be consent given for this information to be retained. If your company in any way deals with personal data, it is essential that new actions be taken to protect this data in the wake of these new rules.

Penalties for non-compliance can be as severe as fines of 4% of annual global turnover, with the most serious infringements carrying a maximum fine of €20million. There will of course be a tiered system in terms of infringements.

For further information, we recommend visiting the website of our friends at Chartered Accountants Ireland, where they have put together a concise and informative booklet which will discuss everything you need to know about the GDPR.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Revenue will no longer add charges for payments via Credit Cards

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Re-Charging your Wallet

The convenience that comes with our current modern lives of being able to pay for and receive items immediately digitally as well as dealing with many or our transactions in a virtual manner does of course have its downsides. Whilst modern life has us all connected to each other at all times via our phones this does cause a new innate lack of face to face conversation and whilst being able to pay online using our cards is convenient, there is also the downside of so many hidden charges being applied to our accounts that we may not have accounted for in our budgeting.

There was good news in this regard earlier this month as it was announced that as of April 5th 2018, Revenue would no longer be adding charges for payments via credit card, whether these cards are personal, business or international. This will bring Ireland in line with new EU Rules enforced early this year which banned any surcharges on payment of tax liability. This charge could add as much as 2% onto the tax bill of those paying online. Revenue’s previous 1.1% charge was as a result of service provider charges, which will now be abolished for these payments.

Revenue have stated that this is in line with their focus on making it easier and more convenient for customers to do business online, which can only be a positive step in our busy digital modern lives, and one which we think will be of great benefit to all. Revenue have already taken steps to make online transactions easier with the upgrading of their MyAccount online service which takes the headache out of a great many tax issues and allows people to do most of their transactions from the comfort of their homes or offices, so we welcome any further changes that will ensure our clients and friends have clearer minds and fuller pockets at the end of the day.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Revenue – New Changes To Be Aware of

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We have spoken at length in the past about the many ways in which Revenue are striving to make it easier and more convenient for people to deal with their tax transactions online, from a revamping of the MyAccount system to a reduction in fees and a strong clamp down on evasion using all the digital tools at their disposal there has never been a better or simpler time to file or query your tax transactions.

Next year (2019) there is set to be an overhauling and modernisation process in place for PAYE. Throughout the month, employers are due to receive letters from Revenue detailing their plans for PAYE Modernisation. This modernisation will result in real time PAYE reporting and is due to be officially put into place in January 2019. The letters will be tailored to the company’s requirements utilising Revenue records as there will be different categories of letter issued to ensure that companies receive the information most relevant to their business. Companies using payroll software or smaller companies will receive different information than those who do not use software, or larger companies for example. Employers will be asked to submit employee lists and relevant details regarding their employees to Revenue later this year in order to set the wheels of PAYE modernisation in motion.

In addition to this major overhaul, there will be many other changes made, this month a new PPS number checker will be available via the online services allowing up to 10 PPS numbers to be verified at a time using names and the given PPS number, this will certainly be a vital new service. Later in the year a number of changes will be made to the Revenue Online Services (ROS) dashboard, giving a new look and increased functionality to the system. There will be a new service for “Employer Payroll Services” and a new “favourites” option allowing easier access to most used options.

It is hoped that these new changes will increase the ease with which employers and business owner can process their dealings with Revenue and that the increased functionality of the website itself will limit any confusion or issues making life easier for both the employer and Revenue as it should limit late filing issues etc.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Finance options in wake of Brexit

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Here at EcovisDCA our focus is always firmly on making life and business simpler for our clients and friends. We want you and your business to be a success just as you do and that all important work: life balance can sometimes only be achieved through the acceptance of a helping hand when in need. We have often spoken about funding options and opportunities available in order to either get your business off the ground or plan for an expansion and today we will be discussing a financing option with a twist: Growcap Finance.

Brexit is a word that has faded away into the middle distance somewhat in recent months after the term exploded into our general usage not too long ago. With Britain’s planned exit from the European Union still very much on the cards there is still some cause for concern for Irish businesses who may rely on foreign export or have had dealings with the UK. When engaging in global trade, one of the downsides for many business is the inevitable dealings with customs and VAT. Whilst many people sourcing goods may now look as far afield as China due to a newly improved quality of product, and lower pricing, there is always the issue of customs and VAT obligations when dealing outside the EU. It remains to be seen if Ireland will now face these issues in the future when dealing with goods from the UK once it is outside of the EU.

As a business owner it is your responsibility to ensure that any goods you have sourced from outside of the European Union get safely through the customs process and that the appropriate VAT is paid in full on entry. This can be quite a time consuming and painful process for business owners who have other issues to contend with as well as being an additional drain on vital cash flow to the business as VAT can add an extra 20 to 23% on to your existing payment. This is an issue especially for SMEs who may rely heavily on every penny of working capital available to them.

This is where Growcap Finance come in and can be of benefit to many businesses. Growcap Finance can assist you in funding your products sourced outside of the European Union, taking that additional headache away from you and freeing up some capital for your business. At present, Growcap can fund everything from the purchase price of the product to the logistics and VAT, while also ensuring that the product lives up to expectations before issuing payment. This may be an excellent option for businesses feeling the stress and headaches of dealing with VAT payments and shipments from outside the EU. It may also be a viable course of action in the event of a sudden Brexit.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

The Importance of Financial Management

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As our small island continues to recover from the economic crisis, all eyes are of course fixed on the future. One aspect that is often overlooked however, is the future generation of entrepreneurs, investors, business owners and workers currently in school who will be at the helm of Ireland’s business and financial fortune in future years. We are sure that we do not want the next generation to repeat the same mistakes as their predecessors, but it seems that we are overlooking the ways in which we can provide safety and reassurance that they will not.

Recent research carried out by Empathy Research on behalf of Aviva Life Insurance has shown that many individuals (approximately one third of people) are continuing to pay dearly for the mistakes of the past, without implementing any new fail safe techniques in place to prevent future issues. It seems that though we may have learned from past mistakes, we are unclear how to buffer against them in the future. This research for Aviva has found that over half of Irish people have in fact had no education in the area of financial management, and this is a tradition that is being carried on to the next generation. Ann O’Keefe of Aviva’s Retail Life Insurance has said of the findings that:

“Making smart decisions when it comes to personal finances can have a major impact on your life both in the short term and in the longer term. In Aviva, we believe there’s a strong argument to be made for personal finance to be taught in secondary schools to equip young people with the knowledge and tools they need to make the best financial decisions in their later lives.”

The study also found that women may be likely to be more cautious in investments and financial decisions whilst men are twice as likely to be motivated to invest or save by the need to ensure the financial security of loved ones in the event of illness etc. This findings show a grave lacking in financial education which could protect the next generation from making similar mistakes in the future, as well as showing a gap in the market for strong financial planning courses to be made available to the current generation to enable them to understand the past and plan for the future to ensure that we create a strong financial landscape together.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Entrepreneur Relief and Retirement Relief

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Oh, the Relief!

It is an unfortunate fact of business life that at some point, your own interactions with your company must eventually come to an end. Whether or not you wish to wind your company down entirely, we have spoken in the past about the importance of having an exit strategy in place to ensure a problem-free transition during this time, but some may not know that there are a couple of relief options already in place in Ireland which may be of assistance during this time of major change. Entrepreneur Relief and Retirement Relief can in fact be used in conjunction with one another and may offer some much needed relief when exiting your business.

If the time has come for you to dispose of your business these options of tax relief might be of great benefit to you. In 2014 it was decided that a new relief aimed at entrepreneurs needed to be brought into effect as taxation issues had created a great many challenges for Irish entrepreneurs, who are the essential framework of Irish business life. Entrepreneur Relief offers tax relief to entrepreneurs at all stages of their lives to support the reinvestment of capital acquired from the disposal of business assets. Retirement Relief, on the other hand of course applies only to the retirement stage.

Entrepreneur Relief is especially beneficial to all entrepreneurs under retirement age as it offers a reduced rate of CGT (Capital Gains Tax) to entrepreneurs disposing of their business up to a limit of €1million. This relief reduces the tax rate to just 10% from 33%. Naturally, as with all relief options, some conditions are in place to restrict those who are eligible to apply. Your business must be a currently trading company and you must hold proof of active engagement with the company i.e. you must hold or have held at least 5% shares in the business or have spent at least 50% of your working time in the business over the previous three years.

Interestingly, Retirement Relief can be used on the same disposal as Entrepreneur Relief and applies to individuals over the age of 55. Again there are a number of qualifying conditions that apply here. The disposal must be made by an individual (not a company) aged 55 or over, the disposal must be of qualifying assets and the individual must have been a working director for a minimum of 10 years if the disposal is related to a family company. Retirement is not a requirement of this relief.

We would advise that anyone interested in either or both of these relief options look into them in great detail before organising an application in order to maximise the benefit to you and your business.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Long Term Job Creation & Retention For Your Business

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EII EII, Captain

Job creation and retention has long been a top priority for Irish Business. Following the economic downturn, jobs were no longer a guarantee, rather they became somewhat of a luxury for a time as the job market became increasingly competitive and there were fewer jobs available as companies struggled to maintain their existing employee ratios. Incentives like the JobBridge scheme have been accused of exacerbating this issue, and exploiting workers, resulting in the dissolution of the programme. One programme which has greatly which has continued on through changes and changing times during Ireland’s continuing recovery is the Employment and Investment Incentive (EII) scheme.

The EII Scheme is a tax relief incentive which was previously under the name Business Expansion Scheme. The scheme provides income tax relief to Qualifying Investors for investments in qualifying Small and Medium Enterprises (SMEs) and is one of very few remaining schemes to do so. The Finance Act of 2015 introduced a number of changes to the scheme including new requirements for qualifying companies, which all will now be aware of. There were also some more recent changes made which not all interested companies may yet be aware of.

As part of the Finance Bill 2017, Minister for Finance, Public Expenditure and Reform, Paschal Donohue announced significant changes to be made to the scheme. This followed on from revelations that the EII was not functioning in accordance with sections of the European Commission General Block Exemption Regulations which state that all finance aid schemes considered as risk level should be restricted to independent private investors only and cannot provide relief to those with any close connections to the business. This new amendment will be a major change for interested parties as well as those who have availed of the scheme in the past as from this point on as it will now eliminate all parties apart from private independent investors. Those investors with any connections including any shares owned by them or their associates, family members, partners or descendants are also exempt from participation.

This announcement saw these changes come into effect on November 2nd 2017 and were seen by the Minister as being a correction to an inherent error within the scheme and there is to be a review of the scheme in full in the first half of this year so that any further changes can be brought forward into Budget 2019.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Local Enterprise Offices Support For SME’s

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As discussed last week, the general outlook in Ireland for start-ups and SMEs (Small and Medium Enterprises) has begun to brighten considerably in recent years with the addition of new funding options and the acceptance of these forms of businesses as being a large and important part of Irish business in the modern age.

This week, it was revealed that start-ups and small businesses have also begun to form a large part of the Irish employment recovery as it was revealed that 3,700 jobs were created last year by these types of businesses, backed by their LEOs (Local Enterprise Offices). These offices are seldom the focus of much spotlight, but are often the key to getting a small business off the ground and keeping it running.

Local Enterprise Offices are run by Enterprise Ireland and specialise in assisting these vital small businesses in Ireland in a multitude of ways, from offering advice, information and guidance to creating a calendar of important news, publications and events for these business owners to be aware of. This provision is of vital importance to these smaller companies which may not otherwise find the support they so badly need to get off the ground. Minister for Trade Pat Breen has been quoted as saying of the offices:

“In a challenging environment, LEO clients have contributed substantially to economic development up and down the country, especially outside of the main urban centres.”

There are 31 LEO nationwide, each providing a wealth of essential services to the start-ups and SMEs in the locality. It was also reported that more than 80 small businesses progressed from LEOs into the Enterprise Ireland portfolio in 2017, meaning that these businesses crossed the threshold into viable businesses with the assistance of their LEOs.

Things appear to be looking up for small businesses in Ireland, and with the support of vital structures like the LEOs we may see a great many more new start-ups and SMEs get their big break on Irish soil.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

SME’s The Backbone Of The Irish Economy

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Let’s hear it for the Little Guy

As you all know, we here at EcovisDCA are big supporters of small businesses, new start-ups and SMEs (Small and Medium Enterprises) and we have spoken many times in the past about new and interesting funding opportunities becoming available for these kinds of businesses. We have also spoken in the past about the way in which SMEs can be said to form the backbone of the Irish business world as in reality they form over half of all Irish Businesses. The shows the absolute vital importance of keeping these types of enterprises up and running in Ireland.

This week there has been good news for Irish SMEs as figures compiled by business and credit risk analyst Vision-net show that 2017 was the best ever year for the formation of new start-ups in Ireland. This is not only good news for our business world, but it shows a new and growing level of confidence in doing business in Ireland which can only mean good things going forward for our small island with big dreams.

These figures showed that a total of 22,354 companies were set up in 2017, which is a marked increase on previous years which barely surpassed 20,000 in 2016, the first time these figures have been seen since the late 90’s. Managing Director of Vision-net, Christine Cullen has been quoted as saying that the results are a

“Clear sign of a buoyant economy. Despite the continued uncertainty surrounding Brexit and the Border, the national business community has remained productive and innovative. Ireland is an attractive place to set up and do business, for indigenous and foreign companies alike”.

Unsurprisingly, Dublin was the strongest county for new start-ups, with professional services and finance businesses compiling the greatest share of these new businesses. It was also found that the construction industry continues its ongoing recovery and that there is a burgeoning sense of confidence in these industries that was previously unseen. This means that there is money being leant into these businesses which was not available to them before.

As always, it is important not to let good news let us become complacent, as Cullen states:

“There are important factors to consider. As Ireland approaches full employment, it’s likely that the impressive year-on-year growth that we have seen since the end of the recession will slow. Brexit, too, remains a largely unknown quantity. Its effects on the economy will likely not be felt for several years”.

Whilst this shows positive movement, we do of course have further to go and as always we here at EcovisDCA are always available to help with any new business or finance queries you may have. Please don’t hesitate to get in touch.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY