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Offshore Disclosure Notification

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It can often be difficult to remain abreast of changes to procedures in the financial sector if your business is not operating within this sector. Unfortunately it is essential to be aware of any changes which may affect your business operations.

The Finance Bill 2016 introduced a number of changes relating to Qualifying Disclosures made to the Revenue Commissioners regarding existing offshore assets as well as offshore income and gains. In recent days the Revenue Commissioners have been issuing correspondence regarding these changes in order to keep businesses informed ahead of the changes being put into place, so it is important to read all information carefully to ensure you understand these changes.

These new changes will be in effect from May 1st 2017 and will relate to disclosure which includes any of the below outside of the Republic of Ireland.

  • Income or gains arising or accruing outside of the Republic of Ireland.
  • Relevant accounts – applies to both bank accounts and share accounts.
  • Relevant property.

These changes mean that any disclosures made to the Revenue Commissioners from May 1st 2017 onwards relating to offshore assets, income or gains will not be afforded any mitigation of penalties, meaning that the penalty will be 100% of the underpaid tax. Disclosures made before this date will benefit from the usual mitigation of penalties imposed by Revenue. This can often significantly reduce the amount payable. As such, waiting until after this date can result in a significantly higher payment being due and we would advise against waiting in order to reduce this risk.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

 

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

TIS THE SEASON TO FILE TAXES

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Fa la la la la la la la lateness carries penalties. Sorry, once the Christmas lights go up these things take on a life of their own. We are all aware of how urgent it is to ensure that our taxes are filed and the penalties which can apply in the event of late filing. As always we strongly advise staying on top of these matters and filing/paying early insofar as possible to avoid future issues. As we approach the end of the 2016 tax year, we would like to take a moment to advise you of some fast approaching deadlines which may slip under the radar in this festive season.

 

The due dates for payment of CGT (Capital Gains Tax) are:

 

15th December 2016 for disposal of assets in the period of 1st January 2016 to 20th November 2016.

31st January 2017 for disposals in December 2016.

It is pivotal that any chargeable gains arising during these time periods be paid up before the deadline to avoid further unnecessary complications.

 

Should a disposal fall under an unconditional contract, the disposal date will refer to the date of signing the contract, whilst if a disposal falls under a conditional contract, the disposal date will refer to the date on which the condition is satisfied.

 

Should you require any help, assistance or guidance on these or any other tax or business matters, please don’t hesitate to contact us.

 

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

DON’T FEAR THE TAX MAN

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Don’t Fear the Reaper…I mean Taxman

 

Whilst the temperatures have plummeted in recent days (the weather outside, is indeed frightful), things are certainly set up for tax evasion investigations in Ireland. The recent push towards a further clamp down on tax evasion has been a hot topic of conversation in recent months. Minister for Finance Michael Noonan recently published his finance bill which promises a further clamp down on tax evasion and a reduced level of tolerance for these activities by closing certain loopholes currently in use. The new finance bill allows six months for getting affairs in order in terms of offshore assets which it is advised should be tidied up well before the clampdown begins in earnest.

 

It is reported that the Office of Revenue Commissioners will now have access to and be able to comb through an unprecedented amount of international data in order to begin this clamp down on tax evasion both on and offshore. As of next year, Revenue will have automatic access to information regarding income and assets in overseas institutions, which previously may have acted as somewhat of a loophole for Irish tax payers. Previously, there were a number of areas which were somewhat protected from this level of intense scrutiny which allowed for tax evasion to take place such as Bermuda, the Cayman Islands and Switzerland. This, combined with the Revenue’s new increase in technology for clamping down on tax evasion that we have previously discussed, will make it incredibly difficult for tax evaders to carry on normal activities.

 

Previously, in order to check Irish records against those of other countries, the Revenue would have had to place a request based on existing information or concerns. The new technology being put in place by the Revenue will allow for cross referencing between Ireland and other countries for data on individual cases which may previously have been unavailable to them. This in turn will allow them to paint a clearer and fuller picture of an individual’s tax affairs and to assess patterns for any suspicious or untoward behaviours. It is expected that Irish records will be automatically cross referenced with those of over 100 other countries by late 2018. This will bring Irish systems in line with those currently being used in the United States.

 

Paul Rigney of Revenue has stated that there will be time for individuals to set their affairs in order as per Minister Noonan’s finance bill but warned that there will be a zero tolerance policy after this point.

 

“Those with offshore assets have until May 1st to make a voluntary disclosure before Revenue uses the “full rigour of the new system. This is the last opportunity for people to come forward because after that, the penalties are severe.”

 

Therefore it is strongly advised that these protocols are followed in order to avoid issues.

 

Should you require any help, guidance or advice on these or any other financial or business matters please don’t hesitate to contact us here at DCA Accountants where we will be happy to be of help.

 

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

THE POWERS THAT BE…MORE POWERFUL

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It was announced in the recently published Finance Bill that tax officials would be granted a whole new level of powers. In a move which has been considered by some to be of questionable moral grounding, as of now, tax officials will be permitted to access private financial information about individuals without being forced to inform those involved that their finances are being looked into.

 

Once a court appeal is granted, these tax officials will be able to access previously secure information from banks or other financial institutions without the knowledge of those affected.

 

Revenue themselves have also been granted additional powers in relation to searching properties and belongings for information when engaged in an investigation. Revenue have also been given more powers to utilise when dealing with those attempting to avoid Capital Gains Tax.

 

These measures are all part of a previously announced plan to increase the power afforded to the Revenue Commissioners and increase the ease and effectiveness of an extra clamp down on tax defaulters.

 

Previously, it was required that the Revenue would both need to know the identity of the suspected defaulter and that they would be required to inform those affected that their finances are being looked into, particularly when accessing secure information from parties such as banks and building societies. Now, however, these measures will no longer be necessary, providing the Revenue with a greater ease of access to the information. This may cause some boot quaking for some defaulters, which indeed may be part of the hope.

 

The only requirement with these new measures is that there must be “reasonable grounds” to keeping the information from the suspected defaulter which, given the circumstances will rarely be difficult to provide.

 

If you require assistance with your own tax and financial matters, please don’t hesitate to contact us at DCA Accountants.

NOT TODAY, MR TAX-MAN!

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Tax credits are one of the most easily overlooked aspects of compiling your tax returns. Whilst they vary from person to person there are a number of additional tax credits you may be entitled to as a business owner without realising it. With the October 31st filing deadline rapidly approaching, your tax credits are not something you want to overlook, and knowing what you are entitled to could save you money. We have compiled a list of some of the tax credits you may not have considered but are entitled to.

 

Revenue Approved Permanent Health Benefit Scheme: If an employer deducts contributions from pay, no action is necessary to claim this relief. However, if an employer does not directly deduct contributions, this relief can be applied for in your annual tax return.

 

PAYE – Employee Tax Credit: Available to any employee whose pay is subject to the PAYE tax.

 

Health/Medical Expenses Relief: Available at a rate of 20% for certain medical expenses by completing the MED 1 form. If you have private health insurance, you will be unable to claim relief on any medical expenses which are due to be reimbursed.

 

PRSI: PRSI contributions can be directly queried through your local Department of Social Protection office.

 

Start Your Own Business Scheme: Available until 31st December 2016, this scheme provides tax relief for previously unemployed individuals who start a new business.

 

Start-up Refunds for Entrepreneurs (SURE) Scheme: Those interested in starting up their own company may be entitled to an income tax refund of up to 41% of the capital invested under this scheme. You may also be entitled to a refund of income tax paid over the 6 years prior to investment year.

 

Age Tax Credit: Available to anyone aged 65 or older during the tax year. This credit is doubled for married couples or civil partners if either is aged 65 during the tax year.

 

Single Person Tax Credit: Available to unmarried individuals living alone with the exception of married people who have chosen to be assessed as single people for tax purposed.

 

Married/Civil Partner Tax Credit: Available to an individual who is either married or in a civil partnership. One partner agrees to be the assessable spouse and is entitled to this tax credit as long as they are assessed through joint assessment.

 

Widowed/Surviving Civil Partner Tax Credit: This credit is dependent on when the spouse passed away and whether dependent children as involved. This tax credit will be higher during the bereavement year and is the equivalent of the above two credits.

 

As the deadline of October 31st approaches it would be advisable to submit your information in advance of this date if possible to ensure no unnecessary delays. Should you have any queries about your tax return filing, or if you are concerned that you may be entitled to claim some refunds that you may have overlooked, please don’t hesitate to contact us here at DCA Accountants.

TAX DEADLINE EXTENSION

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Nothing strikes fear into the hearts of business-owners quite as harshly as a looming tax deadline. Here at DCA Accountants we aim to make your day brighter and simpler, so we are delighted to bring you the news of an extension on the ROS Pay & File Tax Deadline.

 

Now, before you all celebrate too much, it is a very slight extension. The previous deadline was October 31st 2015, and has now been shifted to November 12th 2015. Not quite as magnificent a time lapse as you might have hoped, but it might give some much needed wiggle room. This extension will only apply if you file your FORM 11 tax return and use Revenue’s Online Services (ROS) to complete the required income tax payment.

 

We would advise completing this ASAP, as opposed to waiting it out until the last minute to avoid unnecessary stress or mistakes in filing.

 

Whilst this is a welcome extension for most, it is noteworthy that the deadline is becoming consistently earlier each year making returns increasingly difficult. As such, it is vital to stay on top of your documentation throughout the year.

 

It is not yet known if this extension will apply to all tax returns, and until this is confirmed we would suggest assuming that it remains October 31st and aiming for this date in order to avoid any issues. If all taxes are paid under the PAYE system and you yourself had a Capital Gain in 2014, FORM CG1 CAPITAL GAINS TAX must be completed and returned by October 31st.This new extension will not apply.

 

Whilst this extension may be of relief to some, it is advised to carry on as normal and as though the deadline remains at October 31st as it is safer to act under this assumption, than take chances and risk penalties. As always, should you have any concerns or queries we at DCA Accountants are available to assist you in this matter.

AIRBNB – TAX TROUBLE IN THE NEIGHBOURHOOD?

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Short-Term rental website Airbnb has become a go-to staple for travel in recent years. Airbnb acts as somewhat of a middle man between the ‘hosts’ who wish to rent a room or home on a short term basis, and the holidaymaker seeking accommodation. The Airbnb website is one of the easiest travel websites for users of all ages to navigate. The user simply enters the area they wish to stay, and they are given all of the advertisements in this area, complete with pricing, pictures and information about the property. In harder financial times, Airbnb has blossomed as it offers users something different, more transparent, and often cheaper than the usual hotels, without having to pay the host directly.

 

In recent months however, there has been some concern over tax issues with the website, as Airbnb recently stated that they had been asked by the Revenue Commission to provide information on all transactions for the previous year. This revelation caused confusion among many Irish Airbnb hosts who believed themselves to be exempt from tax under the ‘rent-a-room’ scheme. This scheme ensures that those renting out a room in their home are exempt from paying tax on income they earn by doing so, up to a designated threshold. The small-print on this scheme does however specify that it is not applicable to those renting rooms on a short-term basis, which is of course Airbnb’s main ethos.

 

Declan Rigney, assistant secretary of the Revenue’s planning division has stated that there will now be a larger focus on digital marketplaces and peer-to-peer trading in terms of tax payments.

“There are a huge number of businesses trading online. We need to make sure during the course of our audits that all income is returned.”

 

It has been advised that those who feel they may be affected by this information should voluntarily submit the required information ASAP to avoid issues.

 

The Revenue Commissioners have stated that this confusion over the rent-a-room scheme was clarified by them earlier in the year as they view businesses such as Airbnb as a trade. Airbnb’s website currently states that they expect all hosts to adhere to the tax demands of their respective areas.

 

We would advise that any Airbnb hosts keep detailed and correct records of all income and expenses gained through their dealings with the website. If you should require any assistance or advice in this matter please contact us at DCA Accountants.

CREDIT CARD INFORMATION AND TAX EVASION

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It was reported earlier this month that the Revenue were to begin targeting credit card transactions as a way of uncovering tax evasion. This new endeavour came to light after it was revealed that over 2000 Irish companies had made payments to the Revenue Commissioners after failing to declare tax in full.

The Revenue Commissioners say that the practise of examining credit and debit card data to investigate tax payments is now active. The information is being released by merchant acquirer firms. These firms process credit card payments on behalf of the merchant you purchase from. Their data will then be compared to the data submitted by the individual or business in order to assess any issues or differences. Any discrepancies found would be flagged as a potential risk of evasion, to be given a closer look.

How is this information being released, you may ask? Legislation enacted two years ago states that these merchants are obliged to divulge information on transactions over a certain threshold. The Revenue are currently making an attempt to ramp up its digital focus as concerns grow regarding the easier tax evasion in this area.

The general idea here, is to ensure that The Revenue Commissioners have all the information they possibly can, in order to assess effectively. In order to do this, As the Revenue Commissioners have now increased their digital focus, they are now engaging new teams in the advanced analytics area. This process utilises a wealth of digital resources in order to flag potential tax evasion.

Declan Rigney, assistant secretary in the Revenue’s planning division has stated that the information has been of great benefit to their research into potential evaders:

“We are able to match information up with our records and see firstly, do we know about them, and secondly, have they registered with us and have they declared income and so on. After that, we can examine if that cumulative figure for the year matches what they have told us in their income tax or corporation tax returns”

Revenue have now stated that their advanced software, known as the Risk Evaluation Analysis and Profiling (REAP) system – (which sounds a lot more violent than it is we promise), can now accurately predict whether someone is potentially evading tax payments or not. This system can also compare cases in order to highlight potential issues that may otherwise have gone unnoticed.

So, it would seem that the ‘Tax Man’ has now well and truly entered the modern age, and with all this technology at the Revenue’s disposal it hopes to ensure that tax evasion becomes a thing of the past.

If you require any assistance or advice on managing your own or your businesses taxes and finances, please don’t hesitate to contact us at DCA Accountants.