Insights

Finance Act 2022 introduced the requirement for employers to notify Revenue of certain payments made to employees known as ‘reportable benefits’. The introduction of this reporting requirement is subject to a commencement order; however, the target implementation date is 1 January 2024.

All taxpayers who took part in the Debt Warehousing Scheme (“DWS”) as well as those for whom the DWS was automatically made available (taxpayers in Revenue’s Business and Personal Divisions) but who did not avail of the scheme, have the opportunity to self-review their tax returns, make an unprompted qualifying disclosure and avail of favourable treatment. The deadline for making such unprompted qualifying disclosure is 31 January 2023.

Finance Bill 2022 (the Bill) contains the legislative provisions to implement many of the Budget 2023 announcements as well as a number of other measures not already announced. In this article, we outline the key measures, which relate to employees and employers.

In December 2021, the European Commission (EC) published its proposal for Anti-Tax Avoidance Directive III (ATAD III) which aims to discourage the misuse of shell companies within the EU.

This correspondence, deemed a Level 1 Compliance Intervention, offers all eligible taxpayers the opportunity to self-review their tax returns for Period 1 (which ended on 31 December 2021 or 30 April 2022 where extension applied) and make an unprompted qualifying disclosure by 31 January 2023 in relation to any additional tax liabilities identified.

A foreign employment tax obligation can arise from as little as an employee spending one day working in a foreign country. Such obligations should be considered from a very early stage given the high personal tax rates that apply across Europe and associated penalties for companies who fail to register for and operate payroll withholding taxes.

SARP was first introduced in 2012 to encourage the relocation/assignment of key employees to Ireland. Where certain conditions are satisfied, 30% of taxable employment income over €75,000 will be disregarded for income tax purposes. Income which is disregarded for income tax purposes is not exempt from the Universal Social Charge (USC) or PRSI.

The updated Code aims to provide a clear understanding of employment status and assist where individuals are being categorised as being ‘self-employed’ when ‘employee’ status would be more appropriate.

A PAYE Exclusion Order (PEO) issued by Revenue to an employer relieves the employer from the obligation to deduct tax at source under the PAYE system from emoluments paid to an employee.

Employers are obliged to submit a Form RSS1 in any year in which an option is granted, exercised, transferred or released to an employee. The RSS1 for 2020 should be completed and submitted online via Revenue Online Service (ROS) on or before 31 March 2021.

Subsidy payments by Revenue to employers under the Temporary Wage Subsidy Scheme (TWSS) and paid to employees are treated as part of the employees’ emoluments i.e. salary and wages, for tax purposes. The subsidy amount paid to employees via payroll was not subject to tax under the PAYE system however, the amount received by the employee is liable to income tax and Universal Social Charge (USC).

The Irish Revenue Commissioners have issued much welcomed guidance and clarifications in relation to short-term business visitors (“STBVs”) working in Ireland. The revised guidance applies from 1 January 2020 and will significantly reduce the administrative and cashflow burden for employers in this area.