Contributing Firms:
The Irish Tax Monitor September 2020
This Month's Roundtable

The Questions

As the UK completes its exit from the UK in December, many players in the Irish asset management industry now look to surrounding VAT implications. What are some of the key considerations for the asset management industry in navigating the changing VAT landscape?

In August, the Irish Revenue Commissioners published a guidance document on the treatment of the taxation of ‘gross roll up’ as it applies to domestic funds. What are the implications, and does the overall comprehensive guidance document contain any important other findings for Irish funds companies?

The forthcoming Budget/Finance Bill
In an unprecedented year for ad hoc tax policy on the corporate and personal taxation fronts, due to Covid- 19, can you summarise some, (circa four) of the most important outstanding areas of clarification regarding the temporary measures that can be expected to crystallise in legislation in the Budget? (This could also make reference to the CCCBA - I Pre Budget submission (see also last issue).

In the wake of the July Stimulus (also discussed in last Month’s Irish Tax Monitor) there were a number of clarifications on the operation of Covid tax reliefs, notably in regard to Income Tax Relief for self-employed individuals adversely impacted by Covid-19 restrictions. What is your assessment of the current guidance on this?

The Revenue Commissioners have recently published renewed guidance on the high-income individuals’ restriction (HIIR) (which is intended to limit the total amount of specified reliefs that can be used by a high-income individual to a maximum amount each year). (In its Tax and Duty Manual Part 15-02A-05). Will the new guidance result in any significant changes in the regime as it has worked up to now?

As part of the July Jobs’ Stimulus, Ireland’s standard rate of VAT is temporarily being reduced from 23% to 21% for a six month period starting on 1 September. What are the main considerations for businesses?

This Month's Roundtable - The Answers

Brexit is coming down the tracks, and so is the Budget and Finance Bill 2021

Brexit will still have unknown and unintended consequences, but, with the coming of Autumn 2020, there are some certainties, such as the fact that from January 1st next the UK will be a foreign country as regards the operation of VAT. This is considered in this month’s issue by the panel, as are other issues affecting the funds industry in particular, such as Revenue’s recent Guidance report on an important topic from the perspective of the Irish investment funds industry; the treatment of ‘Gross Roll Up’ , from a taxation point of view.

Income tax is a key issue under many heads, particularly from a Covid-19 perspective, and the workings of the July Stimulus measures have been clarified, particularly with regard to their applicability for self employed individuals and self employed SME company directors who are also responsible for the provision of employment to employees, as well as themselves. There have been a number of clarifications in this area, and our panelist Stephen Lowry explains them, (page 24).

In This Month's Issue

The economic turmoil and its taxation consequences

The economic turmoil sparked off by Covid-19 continues to make itself evident. In this issue the Panel addresses a number of issues arising, affecting all firms, in the VAT area; in regard to the impact of the July Stimulus as well as the specific impact in one sector examined this month - asset management.

Analysis - Special Feature

‘Flexible’ working under Covid and issues of tax jurisdiction that may arise

Although the OECD said, early on in the pandemic that it is unlikely that the COVID-19 situation will create any changes to an entity’s residence status under a tax treaty, LISA MANGAN says ‘there still exists a risk that the Irish tax residence position of a company would be weakened where its place of effective management is considered to have moved outside of Ireland, for example, where board directors no longer work in Ireland or the board meetings do not physically occur in Ireland’.