Summary of Irish Tax Measures Announced in Response to the Spread of COVID-19
In response to the spread of the COVID-19, various business support measures have been put in place by European countries. In this article, we summarise the measures announced by Ireland up to 24 March 2020.

Summary of COVID-19 Irish Tax Measures Announced

Businesses and communities are dealing with many COVID-19 related issues that are causing severe business disruption.  The Irish government has been swift to introduce new measures to mitigate the effects of COVID-19 on business. No doubt further measures will be introduced in due course. Revenue has acknowledged that "tax payment difficulties are an inevitable impact of the COVID-19 pandemic" and has advised taxpayers to pay tax liabilities "if at all possible".

SME Supports

On 13 March 2020, the Irish Revenue Commissioners (Revenue) outlined some key advice and actions taken to help SME businesses experiencing cashflow and trading difficulties arising from the impact of Covid-19.  According to Revenue, an SME is a business with turnover of less than EUR3m that is not dealt with by either Revenue's Large Cases Division or Medium Enterprises Division.  The following measures were announced for SMEs: 

  • the application of interest on late tax payments is suspended for the January/February 2020 VAT period and for the February 2020 and March 2020 PAYE (employers) periods;
  • businesses experiencing temporary cash flow difficulties should continue to file tax returns on time;
  • the RCT rate review scheduled to take place in March 2020 is suspended;
  • critical pharmaceutical products and medicines will be given a Customs "green routing" to facilitate uninterrupted importation and supply;
  • all Revenue debt enforcement activity is suspended until further notice, and
  • current tax clearance status will remain in place for all businesses over the coming months.

Revenue's advice for businesses other than SMEs experiencing temporary cash flow or trading difficulties is to contact the Collector-General's office on +353 1 7383663 or engage directly with their branch contacts in Large Corporates Division or Medium Enterprises Division.

Tax Repayments/Refunds 

Revenue has indicated that it will continue to prioritise the approval and processing of tax repayments and refunds (primarily VAT repayments and PSWT refunds) to taxpayers. Where verification checks are necessary, Revenue will conduct these through their MyEnquiries service or by telephone.

Revenue Interventions

Revenue has suspended tax audit and other compliance intervention activity on taxpayers' premises until further notice. Where possible, Revenue will engage with businesses to finalise open interventions through MyEnquiries or by telephone. 

Filing Tax Returns

Revenue have reiterated that taxpayers (individuals and businesses) should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible. Where, due to Covid-19, key personnel that compute tax returns are unavailable, Revenue advise that the relevant return is submitted on a "best estimate" basis. They have also indicated that the application of the corporation tax surcharge (for late filing of corporation tax returns) for accounting periods ending June 2019 onwards (i.e. due by 23 March 2020 onwards) is suspended until further notice.

Real Time Foreign Tax Credit for Restricted Stock Unit Cases

The 31 March 2020 filing deadline has been suspended for cases where real time foreign tax credits were provided through the payroll. The 2019 income tax return for affected employees will revert to the standard income tax filing deadline (i.e. 31 October 2020 or 12 November 2020 for ROS filings, as appropriate) for that return. Revenue advised that the employer notification to Revenue in relation to such cases should be made as soon as possible, but no later than the applicable extended income tax filing date.

Share Schemes Filing Obligations

The filing deadline for all 2019 share scheme returns is extended from 31 March 2020 to 30 June 2020.

Special Assignee Relief Program (SARP)

The 90-day employer filing obligation, which is a requirement for an employee to be eligible to benefit from SARP relief, is extended for a further 60 days. Revenue believes that this extension should provide sufficient time for employers to file the required return.

Trans-Border Worker Relief

If employees are required to work from home in Ireland, due to Covid-19, such days spent working at home in Ireland will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met. 

PAYE Dispensation Applications

Due to the current restrictions on travel, Revenue will not "strictly" enforce the 30-day notification requirement for PAYE dispensations applicable to short term business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 work days in Ireland in a tax year.

Foreign Employment - Operation of PAYE

Revenue will not seek to enforce Irish payroll obligations for foreign employers in "genuine" cases where an employee was working abroad for a foreign entity prior to Covid-19 but relocates temporarily to Ireland during the Covid-19 period and performs duties for his or her foreign employer while in Ireland.

PAYE Exclusion Order – Irish Contract of Employment

The tax position of employees working abroad for a foreign employer under an Irish contract of employment, where a PAYE exclusion order is in place, will not be adversely impacted if the employee works for more than 30 days in Ireland due to Covid-19.

Residence Rules – Force Majeure Circumstances

Whether an individual is considered tax resident in Ireland in a particular tax year depends on the number of days (or part of a day) spent in Ireland in that tax year (or preceding tax year). 

Revenue's existing position is that in circumstances where an individual is prevented from leaving Ireland on their intended day of departure due to "extraordinary natural occurrences" or an exceptional third party failure or action, none of which could reasonably have been foreseen and avoided, the individual will not be regarded as being present in Ireland for tax residence purposes for the day after the intended day of departure, provided the individual is unavoidably present in Ireland on that day due only to force majeure circumstances.

Revenue has clarified that where a departure from Ireland is prevented due to Covid-19, Revenue will consider this force majeure for the purposes of establishing an individual's tax residence position. 

E-Working and Tax

Revenue has updated its "e-Working and Tax" manual.  Details can be accessed at E-Working and Tax 

Corporation Tax and Presence in Ireland or Outside Ireland Resulting from Covid Related Travel Restrictions

Where an individual is present in Ireland (or in another jurisdiction and would otherwise have been present in Ireland) and that presence is shown to result from travel restrictions related to Covid-19, Revenue will be prepared to disregard such presence in Ireland, for corporation tax purposes, for the company where the individual is an employee, director, service provider or agent. Revenue stresses that the individual and the company should maintain a record of the facts and circumstances of the "bona fide" relevant presence in Ireland, or outside Ireland, for production to Revenue if evidence of such presence is requested.

Relief from Excise Duty for the Manufacture of Hand Sanitiser Products

Alcohol products tax will not apply to alcohol used in the production of a range of medicinal and other products such as hand santisers. 

Deferral of stamp duty on credit cards

The Minister for Finance announced on 18 March 2020 that he was deferring the annual collection of stamp duty on credit cards (i.e. EUR30 per credit card account) from 1 April 2020 to 1 July 2020.  The collection date will be changed automatically by financial institutions.  

Deferral of payment of LPT

Irish Revenue announced on 16 March 2020 that for property owners who opted to pay their LPT for 2020 by annual debit instruction or single debit authority payment the payment date will automatically change from 21 March 2020 to 21 May 2020.    

Social Protection Measures

Temporary COVID-19 Wage Subsidy Scheme

The Irish Government announced on 24 March 2020 that it would temporarily implement a wage subsidy of 70% of an eligible employee's take home pay up to a maximum weekly tax-free amount of €410 per week to help affected companies keep paying their employees where they have been adversely affected by the Covid-19 pandemic. Further detail on this subsidy scheme can be accessed here

Your William Fry team is now working remotely, supported by great technology, to ensure delivery of the best standards of service quality, responsiveness and effectiveness. We are committed to helping your business and meeting your concerns during this challenging time.

Our partners, associates and our support teams are available as usual to support your business. We also have a specific COVID-19 Hub on our website to help you.  

Please contact Brian Duffy or your usual William Fry contact if you wish to discuss any tax issue. 

 

Key Contacts

Brian Duffy Partner

Declan Lavelle Tax Partner with William Fry Tax Advisors Ltd

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