Ireland Extends Red Tape Reduction To New Entities

by Jason Gorringe, Tax-News.com, London

12 November 2009

The Irish Revenue Commission has announced that the reduced frequency of tax returns and payments for Employers PAYE/PRSI (pay as you earn and Pay Related Social Insurance) and VAT granted to small businesses will be extended to newly eligible entities.

A reduction in the frequency of tax returns and payments for smaller businesses was introduced during 2006 and 2007:

  • Businesses making total annual PAYE/PRSI payments of up to EUR28,800 became eligible to make their payments on a quarterly rather than monthly basis;
  • Businesses making total annual VAT payments of less than EUR3,000 became eligible to file VAT returns and make their payments on a six-monthly basis; and
  • Businesses making total annual VAT payments of between EUR3,000 and EUR14,400 became eligible to file VAT returns and make their payments on a four-monthly basis.

These simplified arrangements are being further extended to include newly eligible businesses from January 1, 2010.

The benefits of this for qualifying businesses are two-fold:

  • Improved cashflow by only having to make payments at the end of each quarter, four-monthly period or six-monthly period, as appropriate; and
  • Reduced costs of administration through less frequent filing of tax returns.

The Revenue is now in the course of writing to each eligible business advising them of the reduced frequency of tax returns and tax payments that will apply to them with effect from January 1, 2010. For businesses to which the simplified arrangements for VAT returns and payments apply, a copy of the letter will also be sent to the agent or tax practitioner on record. The changes do not require any action by affected entities.

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