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Business Advice
RN Podcast: 2021 – What is in store for the Irish tax landscape in the year ahead
Vivian Nathan, Managing Partner, welcomes Brendan Murphy, Tax Partner, to Roberts Nathan. Brendan joined the firm at the beginning of 2021 to continue the firms expansion and our commitment to providing our clients with dedicated specialist within specific sectors.
On this podcast, Viv and Brendan discuss the opportunities Brendan sees for businesses from a tax perspective in the year ahead and what will be the key areas of focus for tax advisors. They also look at the impact to date of Brexit and how this will continue to effect trading between Ireland and the UK. Finally they will look at the cost Covid-19 is having on the Irish economy and what the future Irish tax landscape may look like.
We hope you enjoy listening to our podcast and if you have any questions regarding any of the points raised please let us know.
April 19, 2021
Business Advice
UK Businesses – Do you have the correct Irish VAT number?
Check your VAT number
VIES VAT number validation
Since June 2019, companies registering for VAT have had to specify whether they wish for a “domestic only” or “intra-EU” VAT registration.
The domestic only registration has helped speed up registration process for business seeking to register for VAT however, we have seen a number of instances where businesses are unaware of the need to include an intra-EU registration within their application. In particular we have noted many UK businesses applying for Irish VAT numbers on the basis of being a non-resident company with operations in Ireland and obtaining an IE VAT reg. If the company is importing goods into Ireland for domestic only supply, then the domestic VAT registration is sufficient and they are charged Irish VAT at the point of importation of the goods into the EU. Thus the domestic VAT registration applies only if the company is importing goods into Ireland, storing and distributing them here and not further distributing outside of Ireland.
However if your company is looking to use Ireland as a new trading base in dealing with EU customers this will not be an effective VAT number for EU wide trading.
So check your VAT number. If you get the above message on the VIES system then it is only a domestic VAT registration.
This will cause issues if you are bringing goods into Ireland and then intending to export them to another EU country as you will need to apply for an intra-EU VAT number. It will be the exact same number but will need to be validated as otherwise your customers will get the above notice when the VAT number is checked for EU trading. This causes an issue for your EU customers as you will not have issued a valid VAT invoice.
We have helped a number of clients with this by amending their VAT registration and getting the option for intra-EU VAT registration. This requires additional information for Revenue which we can assist with.
If you would like to explore further options around your business, please contact Brendan Murphy who would be very pleased to assist you.
Brendan Murphy: brendan.murphy@robertsnathan.com
| No, invalid VAT number for cross border transactions within the EU |
March 31, 2021
Business Advice
Revenue Update – Debt warehousing and Covid-19 supports
Last week Revenue began to write to taxpayers who are availing of debt warehousing and other Covid-19 supports. In relation to debt warehousing, Revenue are reiterating the need for all returns to be filed on time, even where warehousing is being availed of on payment. Any taxpayer availing of debt warehousing but does not have all tax filings up to date will be reminded to do so immediately or lose their entitlement to avail of the Debt Warehousing Scheme. Any returns outstanding will be brought to the taxpayers attention in the Revenue latest correspondence.
For taxpayers availing of both Debt Warehousing and either the Employment Wage Subsidy Scheme or the Covid-19 Restrictions Support Scheme, they will be advised to bring any outstanding returns up to date within 21 days or their tax clearance will be rescinded and they will no longer be eligible for any of the support schemes.
Revenue have also began a second stage of TWSS reconciliation, seeing employers who have availed of the scheme receiving a detailed reconciliation through ROS. Employers have until the end of June 2021 to review the information contained in the reconciliation by Revenue and accept, appeal or make any required adjustments to their claim by this date.
It is also worth noting for taxpayers who are not availing of debt warehousing but do have tax liabilities outstanding that Revenue will seek to enforce debt collection of outstanding liabilities over the coming weeks as highlighted in a press release earlier this month.
Finally, late filing surcharges for corporation tax returns had been suspended from March 2020, however Revenue have now confirmed that for corporation tax returns due between 23 March 2020 and 23 June 2021 (i.e. accounting periods ended between 30 June 2019 and 30 September 2020), will need to be filed by 30 June 2021. Corporation tax returns (including iXBRL financial statements if required) will be required to be filed on time from this period on to avoid late surcharges.
If you would like to explore further options around your business, please contact Brendan Murphy who would be very pleased to assist you.
Brendan Murphy: brendan.murphy@robertsnathan.com
March 30, 2021
Brexit
Is Brexit Having a Damaging Impact on your Profit Margin? – Solutions Considered
As an Irish based accountancy and business advisory firm, Roberts Nathan assists frustrated UK and Irish business owners who are confused, worried, and uncertain where to turn to in a bid to maintain their turnover and profitability following Brexit.
Main Challenges of Brexit
Companies in the UK have been approaching us to help them find a way forward when they experience one or all of the following challenges:
- Extra Brexit-related charges for exporting into the EU means your profit margins are eroded and now it’s far less viable to continue to trade in the EU.
- Your customers in Europe are being asked by couriers to pay VAT upfront on the goods being shipped to them, resulting in those customers becoming disgruntled and ultimately sourcing the same product elsewhere.
- Delays at ports which means your customers are not getting their goods on time when needed.
- More forms and paperwork resulting in more admin and headaches. Many businesses had to hire more staff to handle the extra admin - meaning more costs.
February 2, 2021
Brexit
Real Brexit 1 month in – From IT services to dresses to skincare and live Horses the VAT implications
The (European Union) EU and the United Kingdom (UK) finally reached agreement on a Free Trade and Cooperation Agreement (TCA), avoiding a hard Brexit at the end of December. However, this does not change the fact that the UK has left the EU and therefore is no longer part of the EU single market and customs union and is now regarded as a third country.
The first real trading weeks since the UK departure have highlighted the very real issue for a number of clients and new contacts we are assisting on VAT matters. From understanding how VAT now applies on point of entry on the movement of goods and whether to remain as the ‘Importer of Record’ to the UK for Irish businesses. We have been advising Irish and UK based clients from a wide range of sectors around VAT treatments on trading from ladies dresses to skincare products and from IT services to live horses all in the last few weeks as trade items start to move between the UK and Ireland. Including assisting with potential registration for UK VAT with HMRC by Irish traders. If your business needs advice in these areas for B2B or B2C transactions between the UK and Ireland please contact us at dublin@robertsnathan.com or cork@robertsnathan.com and we can assist.
February 2, 2021
Business
Do you help international companies enter new markets?
Join Aidan Scollard, Partner at Roberts Nathan, who in conjunction with Soft Land Partners will be speaking to professionals who help international companies enter new markets at this free online event taking place on Thursday 4th February from 4-5pm.
Register your attendance by clicking here.
February 1, 2021
Business
CRSS and the Construction Industry
The two most important schemes available to employers and businesses across the country at this time are the CRSS (Covid Restrictions Support Scheme) and EWSS (Employment Wage Subsidy Scheme). Under the current CRSS guidelines, the construction industry is not permitted to make a claim under CRSS as they do not satisfy the guidelines whereby they operate from a fixed premises that is required to prohibit or considerably restrict customers from accessing their premises. They may still be eligible to claim the EWSS wage subsidy.
To learn more about this contact Brendan Murphy, Tax Partner at Roberts Nathan brendan.murphy@robertsnathan.com or call (01) 876 4550.
January 28, 2021
Business
Deal Done – EnviroChemie Group acquires IWM
EnviroChemie Group, headquartered in Germany and a subsidiary of SKion Water GmbH, has acquired Dublin-based Industrial Water Management Ltd. (IWM) for an undisclosed sum.
Founded in 1976, EnviroChemie supplies sustainable system solutions worldwide for all the tasks involved in industrial water treatment and the treatment of process water, circulation water, cooling water, boiler water and wastewater.
IWM specializes in cooling tower, steam boiler and water hygiene services, including legionella control and water chemicals supply. With 30 employees, IWM generates an annual turnover of approximately €3m.
DWF Dublin (Ross Little, Head of Corporate) advised the shareholders and management of IWM on the legals, and Derek Dervan (Partner in Roberts Nathan) provided corporate finance and tax advice to the shareholders and management of IWM.
January 26, 2021
Business Advice
Are you a UK Based Director of an Irish Registered Company?
The (European Union) EU and the United Kingdom (UK) finally reached agreement on a Free Trade and Cooperation Agreement (TCA), avoiding a hard Brexit. However, this does not change the fact that the UK has left the EU and therefore is no longer part of the EU single market and customs union and is now regarded as a third country. This creates a very real issue for a number of companies and their Directors in the UK and Ireland.
In this article, Roberts Nathan Partner Aidan Scollard reviews the potential significant changes for UK resident Directors of Irish registered companies as the UK now becomes a third country. Although there are more than 60,000 Irish Directorships of UK registered companies there are also a significant number of UK based directors of Irish companies for which Brexit now creates significant changes.
EEA Resident Director RequirementCompanies Registration Office have previously alerted service providers to the fact that under Irish company law an Irish registered company must have at least one European Economic Area (EEA) resident Director on the board on an ongoing basis or a bond in place to cover filing liabilities.
Many Directors based in the UK who are either of Irish decent or UK based companies who have established Irish entities as part of their Brexit planning will need to consider this likely change.
Where an existing Irish company has fulfilled this Director requirement by appointing a UK resident director they should now consider replacing that director or adding an additional director who is an EEA-resident.
It should be noted that this requirement is based on residency, not nationality. Thus for example, a company director of Irish nationality who lives in the UK and has done so for a number of years is unlikely to satisfy the EEA requirement in the future which is a question a number of our clients have been considering.
S137 BondIt is possible for a company to put in place a Section 137 Revenue Bond which is an insurance policy that CRO approve in replacement of having an EEA resident individual on the board. This insurance policy covers against fines or penalties incurred to the value of €25,000 for non-compliance and covers the company for a period of two years at which point the company will either need to renew the bond or appoint a director who meets the requirement.
The bonds are relatively easy to put in place but will have a premium cost to maintain for the two year period and we have put these in place for a number of clients recently.
The Exception to the Rule – ‘Real and Continuous link’It is possible for the Directors of an Irish Company who have no EEA-resident directors to apply to the Revenue Commissioners for a Statement under Section 140 of the Companies Act 2014 which, if granted, will relieve the company from the requirement to hold a Bond or to have an EEA-resident director.
This Statement is granted based on the company having a ‘real and continuous link to the State of Ireland’. The successful company will need to satisfy one or more of the following two conditions:
- The affairs of the company are managed by one or more persons from a place of business established in the State and that person or those persons is or are authorised by the company to act on its behalf.
- The company carries on a trade in the State.
Furthermore, a company may be granted this Statement based on either of the following two conditions:
- The company is a subsidiary or a holding company of a company or other body corporate that satisfies either or both of the conditions specified in 1 and 2.
- The company is a subsidiary of a company, another subsidiary of which satisfies either or both of the conditions specified in 1 and 2.
This Statement is granted based on retrospective activity and will generally not be granted to a company that intends to have a real and continuous link to the state.
Once the Statement is made by Revenue to the successful company, the Company Secretary can apply to the Registrar of Companies for a certificate that exempts the company from the Section 137 bond requirement or the need to have an EEA-resident director appointed to the board.
Application for this exemption to Companies registration office must be accompanied by this statement from the Revenue Commissioners made within two months of the date of the application of the Revenue Commissioners statement.
This is the common basis that we see UK parent company clients using for their Irish operating subsidiaries and we have helped a number of clients in this area where they can clearly prove that there is a real and continuous activity here in the Irish state.
Final WordCompany Directors need to consider the implications since the UK has left the EU and consider their options. As with any legal or accounting issue early advice is important.
Contact us if you wish to discuss the impacts of any of these changes to your company structures here in Ireland and any structure planning requirements or to obtain a bond.
January 21, 2021
Brexit
Brexit deal done; What next?
Aidan Scollard, Partner at Roberts Nathan, provides his view on what Irish businesses dealing in cross-border trade with the UK need to consider following the recent Brexit agreement between the European Union and United Kingdom of the Free Trade and Cooperation Agreement.
The Deal
The (European Union) EU and the United Kingdom (UK) finally reached agreement on a Free Trade and Cooperation Agreement (TCA), avoiding a hard Brexit and the risks of duties and tariffs under WTO rules. However, this does not change the fact that the UK has left the EU and therefore is no longer part of the EU single market and customs union and is now regarded as a third country. This status has significant consequences for businesses in different areas such as cross border trade, the imposition of VAT on transactions and the free movement of people.
At 1,246 pages and affecting over $900 billion worth of goods and services, the TCA is the most ambitious and far-reaching trade agreement ever concluded by the EU. Irish businesses will need to fully comprehend the effect of the TCA on cross-border trade between the EU and UK.
A new Partnership Council, co-chaired by the European Commission and the UK government, will oversee the agreement’s implementation and management. A large number of committees and working groups will be established to oversee the details of new arrangements at a more-granular level, including resolving any technical issues arising from the agreement or ensuring proper functioning of new rules.
The new UK-EU relationship is fluid, and these bodies will be making judgments and issuing guidance that will have the potential to change market access and frameworks. In short, things are likely to change and there will be an extended period of adjustment.
Highlights
Further review of particular aspects of the TCA will be required in the coming months, but in the meantime we set out some highlights of the main initial impacts of the TCA:
TARIFF AND QUOTA FREE TRADE OF GOODS
- The TCA establishes zero tariffs or quotas on trade between the UK and the EU, where goods comply with rules of origin requirements.
- Notwithstanding the tariff and quota free trade enshrined in the TCA, certain technical barriers to trade continue to apply and address issues related to technical regulation, conformity assessment, standardisation, accreditation, market surveillance and marketing and labelling.
- While Brexit ends the EU ease and simplicity of moving goods freely, the TCA adds administrative burdens and no duty or tariff taxes.
- The TCA includes well-established provisions on cross-border trade in services that will secure continued market access across a broad range of sectors, including professional and business services, financial services and transport services, and will support new and continued foreign direct investment.
- In relation to financial services, although the TCA provides for “continued market access” the details have been left for later. The EU and the UK are yet to discuss “specific equivalence determinations” which will eventually be codified in a Memorandum of Understanding.
- The UK and the EU have agreed a framework for the recognition of professional qualifications which is based on the EU’s recent free trade agreements.
- The effect of Brexit and the TCA on cross-border trade in services differs from sector-to-sector. For example, UK resident financial services firms previously possessed “passporting rights” which allowed them to sell financial services into the EU. The TCA has not granted equivalent rights meaning that on 1 January 2021 UK resident financial firms will (as expected) lose their right to sell financial services in the EU.
- One of the key issues of concern of the EU was ensuring that the UK could not grant subsidies (tax or otherwise) to UK businesses which would effectively allow them to undercut similar businesses in the EU.
- The EU and UK are free to determine their own rules relating to the granting of subsidies but are bound by broad principles which must inform the contents of the rules which must ensure that the granting of a subsidy does not have detrimental effects on the trade between the EU and UK.
- The EU and UK shall each establish independent bodies which will design and oversee these rules and which are subject to the review of their respective domestic courts.
- The EU and UK have agreed on a reciprocal dispute resolution mechanism (an accelerated arbitration procedure) where a party is of the opinion that a subsidy is causing, or is at risk of causing, significant harm to its industries.
- Whilst part of the EU, the UK was bound by EU laws related to state aid and government subsidies and was subject to oversight by the European Court of Justice (EUCJ), a sore point for the UK public. Brexit effectively removes the applicability of these laws and jurisdiction of the EUCJ.
- There is also a ‘most-favoured nation’ clause, which ensures that, if either the UK or the EU gives more-favourable terms to another country in future, those terms will automatically extend to the UK/EU deal.
- However, these provisions are subject to a long list of exceptions, which vary from one member state to another.
- Residence rights in existing cases in the UK and EU will continue to be respected as long as the residence situation remains unchanged. New residency applications after the transition period will likely be subject to the same procedures as for third countries.
- Existing (frontier) workers will have the right not to be discriminated against on grounds of nationality as regards employment, remuneration and other conditions of work and employment. In addition, they will have the right to take up and pursue activities and assistance by employment offices in the same way as offered to own nationals as well as rights to tax, social advantages, housing benefits and access to education for their children.
- Prior to Brexit, UK citizens (like all other EU citizens) were granted unrestricted rights to live and work in the EU, and vice versa. Post Brexit, closer consideration will be required for non-EU workers and transfers, however the UK / Ireland Common Travel Area provisions allow for continuation of citizens of each of those countries to live, work and retire to each other’s jurisdiction.
January 8, 2021