Ireland Reduces Tax Reporting Burden

by Robin Pilgrim, LawAndTax-News.com, London

10 November 2010

The Irish tax authority, the Revenue Commissioners has announced an extension to the government initiative to cut down tax reporting requirements for small-sized enterprises.

The tax authority said that it would soon be dispatching information to each eligible businesses advising them of the reduced frequency of tax returns and tax payments required from them with effect from January 1, 2011. A copy of the letter will also be sent to the agent or tax practitioner on record for eligible value added tax (VAT) and Relevant Contracts Tax (RCT) customers but not in respect of other concerned taxes.

Reductions in the frequency of PAYE/PRSI (pay-as-you-earn/pay-related social insurance) and VAT tax returns and payments for smaller businesses, as currently in place, will be extended to eligible businesses in the coming year.

Similar arrangements in respect of RCT will also become available from that date.

The details of the scheme for the coming year are:

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

The Revenue noted that qualifying businesses receive two benefits from the changes in particular: improved cashflow by only having to make payments at the end of each three-, four- or six-monthly period, as appropriate; and reduced costs of administration through less frequent filing of tax returns.

The letters to be received by eligible entities solely confirms qualification and requires no further action.

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