Revenue moves to PAYE Modernisation and Real Time Reporting

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What is PAYE Modernisation?

With effect from 1 January 2019, employers will be required to notify Revenue with details of the amount of the emoluments and the tax due for each employee on/ before the payment date on a real time basis. This means that each time an employee receives a payment or benefit from their employer, the PAYE due and remitted to Revenue must be 100% accurate.

This real time reporting (RTR) process abolishes the requirement to file P30’s, P35’s, P45’s, P46’s and employers will no longer have to produce P60’s at the end of each tax year.

A Revenue Payroll Notification (RPN) will replace the current Tax Deduction Card (P2C) and from the 1 January 2019 all employers will be required to:

  • Obtain the most up to date RPN before making any payments to employees
  • Report employee payments (amount of pay, payment date, amount of PAYE, USC and PRSI deductions) to Revenue in real-time, and
  • Reconcile Revenue’s response to the payroll submission

At the end of each month, employers will receive a statement from Revenue with payroll submission totals. Employers must either:

  • Accept the statement as their monthly return, or
  • Correct payroll data if the statement is incorrect

The statement issued by Revenue will be deemed to be the return if no amendments or corrections are made before the return due date i.e. 14 days after the end of the month (23 days for ROS users who file and pay online).

The legislation governing the new regime, provides that a failure by an employer to correctly operate PAYE on a payment/ benefit to an employee, may result in the employer being liable for the payment of income tax on a grossed up basis. In addition, the existing €4,000 penalty for non-operation of PAYE may be enforced more readily.

Employers should take the time now to review their employee data, payroll processes, policies and systems to ensure that they are ready to comply with their RTR requirements on 1 January 2019.

Should you require any further details on PAYE modernisation or real time reporting (RTR), please contact Anne Comber, Manager of Payroll Services.

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Salary Sacrifice Arrangements

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What is a salary sacrifice arrangement?  

The term salary sacrifice is generally understood to mean an arrangement between the employer and employee under which the employee forgoes the right to receive any part of his or her remuneration due under the term of  his/her contract of employment and in return their employer provides a benefit of a corresponding amount to the employee.

Where an employee forgoes salary payable under an existing contract of employment in exchange for a benefit, the employee remains taxable on the “gross” income payable. The salary sacrificed will be an application of income earned by the employee, not an expense incurred by the employer.

Exceptions

However, there are Revenue approved salary sacrifice arrangements which are exempt from the tax treatment outlined above. These include the following scenarios where the employee’s gross salary is reduced in return for:

  • bus, rail or ferry travel passes through a travel pass scheme
  • exempt shares appropriated to employees under approved profit sharing schemes, provided certain conditions are met
  • the provision of bicycles and safety equipment through the cycle to work scheme

If you have any questions about salary sacrifice arrangements or other employee benefit queries, please contact us.

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The tax treatment of cryptocurrency transactions

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We welcome Revenue’s issuing of an eBrief on the tax treatment of cryptocurrency transactions.

For further information and details, please view Revenue eBrief No. 88/18.

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We are delighted to announce the merger of well-established Cork firm, Moylan Mulcahy & Co with Crowleys DFK

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Pictured (l-r): Tony Cooney (Crowleys DFK Partner), James O’Connor (Crowleys DFK Managing Partner) and Harry O’Sullivan (Moylan Mulcahy & Co Partner)

We are delighted to announce that the well-established Cork firm, Moylan Mulcahy & Co, will merge with Crowleys DFK, effective from 1 June 2018.

The merger will see us welcome Moylan Mulcahy & Co Partner Harry O’Sullivan, along with 5 members of staff, into the Crowleys DFK Cork offices at 5 Lapps Quay.

James O’Connor, Crowleys DFK Managing Partner, commented: “We are delighted with this merger. Moylan Mulcahy & Co has an excellent reputation, in particular in the services it offers to the SME sector. With a natural synergy, not just in terms of services and sectors but also in work practices and values, this provides a major growth opportunity for both firms”.

Harry O’Sullivan said: “This is an exciting time for us. This merger with such a highly-regarded firm is a great cultural fit as the team at Crowleys DFK share our core value of delivering high quality services to clients. We look forward to offering our clients the benefits of access to additional areas of expertise as well as access to the global reach of the DFK International network.”

James concluded, “The merger further cements our reputation as one of the country’s leading SME business advisors for both domestic and international businesses.  We look forward to welcoming Harry and his colleagues to our full-service team.”

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A Trio Reunited

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Pictured (l-r): Pamela Nodwell (Manager, Governance, Risk and Compliance), Edward Murphy (Partner, Head of Tax Services) and Carol Hartnett (Manager, Advisory Services)

Almost 20 years have passed since Carol Hartnett, Pamela Nodwell and Edward Murphy started training together at Crowleys DFK. After qualifying as Chartered Accountants, their subsequent careers took them in different directions but the trio reunited recently and now work together again supporting clients from Crowley DFK’s newly refurbished Cork and Dublin offices.

Carol Hartnett, Manager, Advisory Services

Carol Hartnett joined Crowleys DFK as a trainee accountant in July 1998, having previously completed a BSc in Accounting in UCC.

“During my training contract, I gained a very good overall grounding in business. I was given lots of responsibility and had lots of interaction with clients from a very early stage. This experience opened up multiple opportunities for me in my subsequent career,” Carol stated.

Having qualified as a Chartered Accountant, Carol sought to broaden her experience by working in industry. She left Crowleys DFK in 2002 and spent the next 15 years gaining experience and building her knowledge and expertise with multinational companies including PepsiCo, McAfee and Hewlett Packard Enterprises.

“When I first moved into industry, I worked as a general ledger accountant with responsibility for multiple entities within a European group structure. Then, in 2007, I moved into software revenue recognition where I was a manager for the next six years. I frequently travelled to the UK and California. It was a very fast-paced and dynamic environment,” Carol explained.

In March 2018, Carol returned to Crowleys DFK, taking up a position as manager in the firm’s Advisory Division. The work is project-based which means she supports different clients on a variety of issues. This diversity is what attracted her to the role.

“I am very happy to have re-joined Crowleys DFK as a manager in the advisory division. There is great satisfaction in working with clients to help them solve issues,” Carol said.

Carol is the second former team member to re-join Crowleys DFK in recent times. Pamela Nodwell, who trained with Edward and Carol, before qualifying as a Chartered Accountant in 2002, has also recently rejoined the firm.

Pamela Nodwell, Manager, Governance, Risk & Compliance

Pamela found that her pre-qualification training provided a solid foundation from which to further develop her experience and expertise as she progressed her career.

“During those early years with Crowleys DFK, I worked with a broad spectrum of clients across the public sector, financial services, retail and manufacturing. The experience I gained in accounts preparation, tax returns, audit and CRO filing has stood to me as my career progressed,” Pamela said.

Pamela subsequently moved overseas to gain international experience, spending five years in Bermuda before returning closer to home to take up roles in the Isle of Man and in Dublin. During this time, she gained extensive experience working with multinationals and developed particular expertise in governance, risk management and compliance.

With 15 years’ post-qualification experience under her belt and having held a number of senior management roles — primarily in the financial services industry — Pamela returned to Cork in July 2017, re-joining Crowleys DFK as a manager in the firm’s Governance, Risk & Compliance Division. She specialises in providing practical risk management, internal controls, compliance and process improvement solutions for clients in the financial services sector.

Pamela said, “It is great to be back and working in a division which Crowleys DFK has successfully developed in recent years”.

As well as serving clients, Pamela continues to focus on maintaining and developing her expertise. She is a Fellow of the Institute of Chartered Accountants, a Licentiate of the Association of Compliance Officers in Ireland, a member of the Institute of Bankers and the Professional Risk Managers’ International Association and she is currently studying for a Diploma in Risk Compliance and Internal Audit.

“Crowleys DFK has a great culture for fostering professional development, and the professional approach and focus on client satisfaction that existed in the firm when I joined in 1998 continues to be at the fore. This, coupled with the friendly and approachable culture and ability to attract highly talented and skilled people, contribute to the continuing growth and success of the Crowleys DFK.” Pamela added.

Edward Murphy, Partner & Head of Tax Services

When Edward Murphy joined Crowleys DFK as a trainee accountant in 1998, he little imagined that twenty years later he would be a Partner in the same firm. Like his fellow trainees, Carol Hartnett and Pamela Nodwell, he qualified as a Chartered Accountant in 2002 but unlike his colleagues, Edward chose to continue his career and studies in practice and qualified as a Registered Tax Consultant of the Irish Taxation Institute in 2005.

“I always enjoyed the diversity of working in a practising firm. There is great satisfaction in developing a deep understanding of clients’ objectives and being able to provide commercially effective solutions,” Edward stated.

Having risen through the ranks, Edward was appointed a Partner in 2006 and, today, heads up the Crowleys DFK tax department, supporting multinationals and indigenous organisations. He is delighted that his former colleagues Pamela Nodwell and Carol Hartnett have rejoined the firm.

“It is great that Pamela and Carol are back on the team.  They bring great expertise and experience with them which will strengthen the services we provide for our clients. Fifteen years ago, we couldn’t have imagined that our career paths would converge again. It’s wonderful to be reunited,” Edward said.

Career Success Attributed to Crowleys DFK Training

While their individual career paths took different routes, Edward, Carol and Pamela all attribute their career successes to the initial training and support they received at Crowleys DFK. The firm continues to offer excellent opportunities for individuals interested in pursuing and progressing a career in business. For further information, please visit our Careers page.

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Crowleys DFK Cork Office Revamp

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Since being established in Cork in 1975, Crowleys DFK has witnessed the rapid growth of the city. Known as Ireland’s second city, Cork is the second largest economic hub in the country, with more than 20 financial services firms, over 150 FDI companies and a very strong indigenous SME sector. With an ever-growing University and Institute of Technology, new routes from Cork Airport and many new developments under construction around the city, Cork’s growth levels are showing no signs of slowing down.

Like Cork, Crowleys DFK itself has grown significantly in recent years.  Starting in business as a Sole Practitioner firm with 3 staff the firm today comprises of 6 Partners and over 70 staff with offices in Dublin and Cork.

The Cork office is located in Lapps Quay in the heart of the city and near the soon to be redeveloped Cork Docklands. Due to the firm’s growth the office space was unfortunately no longer meeting our current and long-term business growth needs. Not wishing to relocate and following on from the successful refurbishment of our Dublin office in College Green in 2016, it was decided that our Cork office would undergo a similar refurbishment.

In the summer of 2017, we began working with architect, Ellie Ross from GCA Architects and Designers and contractor, O’Sheas Builders. From inception to completion, we all worked in a very collaborative manner. As a result of this efficiency, our design goals were met within our tight 12-week building works deadline.

According to Colette Nagle, Advisory Partner and the project’s sponsor: “I am delighted to announce that the refurbishment is complete and we have moved back to our newly refurbished office. The open plan design facilitates a more collaborative and innovative environment for our employees, resulting in a happier and ultimately a more productive workplace.”

 

 

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Capital Acquisitions Tax (CAT) Strategy

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Revenue has published a new Capital Acquisitions Tax (CAT) Strategy for 2018 to 2020.

We welcome the publication of the CAT strategy which aims to improve the management of CAT by improving service to support compliance and minimise interaction with compliant tax-payers. The improved services will help to increase customer awareness of Gift Tax and Inheritance Tax obligations.

All tax-payers should be aware of possible CAT liabilities and what they can do to reduce those costs when carrying out Estate planning.

Should you require any further information please contact us.

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Crowleys DFK has been awarded ISO 9001:2015 Quality Management System certification

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Crowleys DFK has reinforced its commitment to excellence in client satisfaction, quality service and continuous business improvement by successfully transitioning to the ISO 9001:2015 Quality Management System standard.

According to Tony Cooney, Partner Governance Risk & Compliance, “We are delighted to have successfully transitioned to this new standard, which has been a real team effort by all our staff.  Quality and client satisfaction has always been at the core of who we are.  This achievement shows that we work hard to ensure our systems meet the very highest international standards for our clients.”

ISO 9001 is recognised as the world’s leading standard for Quality Management Systems.  Based on a number of principles including excellent customer focus, strong leadership engagement, improved effectiveness of internal processes and continual improvement, it is awarded to organisations who achieve high standards in a strategic and risk based approach to quality management and consistency of services.

Tony concluded, “The ISO standard is an excellent way for us to constantly improve our quality control systems and gives us the guidelines and procedures to ensure that quality and integrity is never compromised.  It is a cornerstone to the continued strategic growth and development of the firm in a changing marketplace.”

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Understanding how EU VAT Rules impact Electronically Supplied Services

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Businesses based in Ireland who provide electronically supplied services (e-services) to customers need to understand how to apply VAT correctly, explains Siobhán O’Hea, Partner of Tax Services.

Value Added Tax can be a complicated area for businesses who provide electronically supplied services to customers in the EU or elsewhere.

While the rules may appear daunting, it is important to familiarise yourself with the basics as getting it wrong can be costly.

What are e-services?

The first step in getting to grips with VAT is understanding what is considered an ‘electronically supplied service’ for VAT purposes.

Electronically supplied services, sometimes called ‘e-services’, cover a broad range of services delivered over the Internet or an electronic network. Examples include electronically supplied software and software updates, web hosting, online publications and e-books, the provision of online advertising on websites, music downloads, online games, distance learning programmes which are delivered wholly online without human intervention, and so on.

What these services have in common is that they could not be provided in the absence of information technology.

Tangible products, such CDs and DVDs or printed matter such as books, newspapers and journals, are not e-services even though they may be purchased online.

It is beyond the scope of this article to list everything that is, or is not, considered an e-service, however detailed listings can be found on Revenue website.

If you are in any doubt, it is advisable to seek advice from an experienced tax practitioner familiar with VAT as there is a risk that if you make an error on a sale, you will repeat it on subsequent sales. Errors that go unnoticed for a period of time can be very expensive in the long run.

Place of supply and your customer

Once you have determined whether or not your services are ‘e-services’ for the purposes of VAT, the next step is to look at the ‘place of supply’. This is because ‘place of supply’ rules determine whether a supply is subject to VAT.

If your customer is a business, the place of supply is the place where the business receiving the services is established. Businesses based in Ireland do not normally charge Irish VAT on services to a business established in other EU member states. Instead, the business customer must self-account for VAT in their own country.

If your customer is non-business (a consumer) based in the EU, the place of supply for e-services is the place where the consumer resides. This means that businesses based in Ireland who provide electronically supplied services to consumers in other EU member states are liable to register and account for VAT in each EU member state where they have customers. Revenue provides an optional mini one-stop-shop (MOSS) scheme which aims to reduce the administrative burden and cost of complying with this requirement.

Countries outside the EU

If your business is based in Ireland and you provide e-services to a business or consumer based outside the EU, no EU VAT is charged. However, if the service supplied is effectively used and enjoyed in an EU country, that country can decide to levy VAT.

E-services, provided by suppliers established in a non-EU country to consumers in the EU, must also be taxed at the place where the customer resides or has a permanent address unless the supplier has opted to use the mini one-stop-shop (MOSS) scheme. The non-Union MOSS scheme enables these suppliers to register for VAT in one EU country only.

Complying with EU VAT law

VAT is a complicated tax at the best of times and this article touches on just some of the aspects that create confusion for businesses providing e-services.

For further information and to find out how Crowleys DFK can help you comply with EU VAT law, please get in touch.

TALK TO US

Siobhán O’Hea
Partner of Tax Services
siobhán.ohea@crowleysdfk.ie

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Benefits of locating your business in Ireland

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Ireland enjoys an enviable reputation as a business-friendly location and it’s not just global giants who reap the benefits, says Edward Murphy, Partner and Head of Tax Services.

Ireland is home to many of the world’s most successful companies. Sixteen of the top twenty global technology firms are located here as are twenty-four of the twenty-five top biotech and pharma companies.

However, it is not just global giants that reap the benefits of doing business in Ireland. Many smaller companies also take advantage of the pro-business culture and ease of access to EU markets.

In the software sector alone, more than 900 multinational and indigenous firms employ 24,000 people generating €16 billion of exports annually, according to IDA Ireland, the state agency responsible for promoting foreign direct investment.

Ireland’s Foreign Direct Investment Success

One reason for Ireland’s foreign direct investment (FDI) success is the favourable tax regime. There are double tax treaty agreements in place with 72 other countries and the 12.5 percent corporate tax rate is one of the lowest in the EU.

Other advantages include an attractive holding company regime and tax incentives for certain types of investment. For example, Irish-resident companies carrying out qualifying research and development activity can avail of a ‘Knowledge Development Box’ where eligible profits are taxed at a rate of just 6.25 percent.

Tax not the only reason to locate in Ireland

While tax is undoubtedly an important consideration, it is not the only reason foreign businesses choose to locate in Ireland. Other influences include:

  • Ease of doing business.
  • Supportive state agencies.
  • Political stability.
  • EU membership and proximity to EU markets.
  • Strong legal framework for the development, exploitation and protection of intellectual property rights.
  • English-speaking population (When the UK leaves the EU, Ireland will be the only English-speaking EU member state).
  • Strong talent pipeline with around 30 percent of Irish third level students enrolled in science, technology, engineering and maths (STEM).
  • Collaborative ecosystem where industry and academics work together to the benefit of society and the economy.
  • Growing economy. GDP growth of 4.4 percent is forecast for 2018 and 3.9 percent for
US and Canadian Companies in Ireland

Around 700 US companies are located in Ireland, employing more than 150,000 people.  Anecdotally, US technology companies report that they can hire two engineers in Ireland for the price of one in Silicon Valley, with higher multiples for some engineering specialties.

Notwithstanding the Trump administration’s recent tax reform package which will see US corporation tax rates fall from 35 percent to 20 percent, Ireland’s corporate tax rate is still only around half the US rate when federal taxes are taken into account.

Canadian interest in Ireland is also growing. The EU-Canada trade deal which provisionally came into force in September 2017 will create further opportunities for Canadian businesses seeking to set up in Ireland.

Conclusion

At a time of global economic and political uncertainty, Ireland offers a stable, pro-business environment and is an excellent location from which companies seeking to establish a base in the EU can develop and expand their businesses.

Crowleys DFK assists many foreign owned companies to set up operations in Ireland. For more information and to discuss your specific requirements, please get in touch.

Talk to Us

What Our Clients Say

Edward Murphy
Partner and Head of Tax Services
edward.murphy@crowleysdfk..ie

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