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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New tax deduction of up to €5,000 for pre-letting expenses incurred by landlords

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Up to recently, landlords were not entitled to a tax deduction for pre-letting expenses such as mortgage interest, insurance and repairs incurred before the date a property was first let out.

To encourage owners of vacant residential properties to offer those properties for rent, Finance Act 2017 has introduced a new tax deduction for pre-letting expenses of a revenue nature incurred on a property that has been vacant for a period of 12 months or more.

The pre-letting expenses are now given as a deduction against rental income from that property in the first year it is let out.

Conditions

The property in question must have been vacant for a period of at least 12 months prior to its first letting during the period 25 December 2017 and 31 December 2021.

The expenditure must have been incurred in the 12 months before the property was let out and a cap of €5,000 per vacant property applies.

Claw Back

Where the landlord

  • ceases to let the property as residential premises or
  • sells the property

within 4 years of the first letting, this tax deduction will be clawed back in the year the property ceases to be let by the landlord.

If you have any questions about pre-letting expenses or other rented residential property queries, please contact Eddie Murphy, Partner and Head of Tax Services.

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Changes to Benefit-in-Kind: Private Use of Company Vans

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Normally, where a van is available for the private use of an employee as a result of their employment, the employee is chargeable to PAYE, PRSI and USC in respect of that private use. Travel to and from work is considered private use.

The notional pay in which PAYE, PRSI and USC must be applied is determined the ‘cash equivalent’ of the private use of the van. The cash equivalent is 5% of the (OMV) Original Market Value of the vehicle.

No taxable benefit will arise in relation to the use of a company van where all the below conditions are met:

  1. The van is supplied by the employer for the purpose of the employee’s work.
  2. The employee is required to bring the van home after work.
  3. Apart from travelling to and from work, other private use of the van is forbidden by the employer.
  4. During work, the employee spends at least 80% of his or her time away from the premises of the employer to which he or she is attached.

An exemption to the Benefit-in-Kind (BIK) rule takes place from 1 January 2018 and applies to used and new company vans. If an electric van is made available for an employee’s private use, then no taxable benefit will arise in relation to that private use. This only includes vans that derive their motive power solely from electricity.

Definition of a van

A van is a mechanical vehicle which:

  • Is made solely/mainly for the transport of goods or other burden, and
  • Has a roofed area to the rear of the driver’s seat, and
  • Has no side windows or seating fitted in that roofed area.

Where a crew cab or other similar type of vehicle meets all these criteria, it is regarded as a van rather than a car.

Please contact us if you require assistance with the above.

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KEEP – Share Option Scheme

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The Finance Bill 2017 has introduced a tax efficient share option scheme for employees of SMEs. The Finance Bill provides that from 1 January 2018, SMEs in Ireland will be able to grant KEEP (Key Employee Engagement Programme) share options to their employees.

The change in a tax treatment of these share options means an employee may exercise a “qualifying” share option without incurring the liability to income tax, PRSI and USC that he would have under the current rules. Currently, gains arising on the exercise of a share option at a discount on market value are subject to income tax, PRSI and USC. However, KEEP provides that tax on such shares will be deferred until the shares are disposed of and the employee will pay only capital gains tax at 33% on his profit when the shares are sold.

The KEEP Scheme was introduced to facilitate the use of share-based remuneration to attract and retain key employees in unquoted companies.

A number of conditions must be satisfied in order to avail this tax advantageous KEEP Share Option incentive, which are briefly set out below:

Qualifying share options

  • Shares must be new, ordinary fully paid up with no preferential, current or future rights to dividends or assets on a winding up or redemption
  • Share options must have an exercise price that is not less than the market value of the underlying shares on the date the option is granted
  • There must be a written contract in place setting out number and type of shares, option price and exercise period
  • Share options cannot be exercised within 12 months of grant other than in limited circumstances and options cannot be exercised more than 10 years after date of grant
  • Share options must be granted for bona fide commercial purposes the main purpose of which is to recruit or retain employees in the company and not part of a tax avoidance scheme or arrangement.

Qualifying company

  • For the purpose of the relief the company must be a “qualifying” company i.e. must have been Ireland/EEA incorporated and Irish resident or carrying on a business in Ireland through a branch or agency
  • Qualifying company must be carrying on trading activities with the exception of certain excluded activities set out in legislation. The most notable of these excluded activities include professional service companies, companies dealing in or developing land, financial activities and the building and construction industry
  • The company must be unquoted and remain within the definition of an SME i.e. a company with less than 250 employees and with turnover less than €50m or less than €43m balance sheet
  • The company can only have a maximum of €3m value of share options in issue and unexercised at any one time.

Qualifying individual

  • Must be a fulltime employee/director working at least 30 hours per week
  • The employment held must be capable of being held for at least a further 12 months from the date the option is granted
  • The employee must not acquire or be connected to a person who controls more than 15% of the ordinary share capital of the company during option period
  • Market value of all shares which can be granted in any year of assessment to an employee cannot exceed €100k in any one tax year, €250k in any three consecutive years or 50% of the employee’s annual emoluments for the year in which the option is granted.

KEEP will be available for qualifying share options granted between 1 January 2018 and 31 December 2023. As State Aid approval will be required to introduce this scheme, the scheme is subject to a Ministerial Order.

Contact our Tax Department if you have any questions about KEEP share options or other employee share scheme matters.

 

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VAT and Payment Services

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The Revenue Commissioners have issued guidance which sets out the VAT treatment of transactions concerning the transfer of money.

Guiding Principles

Transactions are defined according to the purpose and nature of the service provided and not according to the person supplying or receiving the service.

The principles that need to be considered when determining if a service qualifies for exemption are as follows:

  1. Exemption can only relate to transactions which form a distinct whole, fulfilling in effect the specific, essential functions of such transfers.
  1. An exempted service must be distinguished from the supply of a mere physical or technical service.
  1. A transfer is a transaction consisting in the execution of an order for the transfer of a sum of money from one bank account to another.
  1. A transfer is characterised by the fact that it involves a change in the legal and financial relationship existing, on the one hand, between the person giving the order and the recipient and, on the other, between those parties and their respective banks; and in some cases, between those banks.
  1. The transaction which produces the change is solely the transfer of funds between accounts, irrespective of its cause.
  1. The mere fact that a service is essential for completing an exempt transaction does not warrant the conclusion that the service is exempt

Status of the Supplier

When considering whether a service qualifies for exemption, the nature of the person supplying the service is not relevant (i.e. the supplier does not have to be a regulated financial institution). It is the nature of the service being supplied that needs to be considered.

Means by which the service is supplied

The means by which the service is supplied e.g. electronically or manually is not a decisive factor when considering the application of the exemption. Again it is the precise nature of the service being supplied that will determine the VAT treatment.

Physical or Technical Services

Where a supplier provides the infrastructure that facilitates the transfer of funds, those supplies cannot qualify for VAT exemption unless they themselves fulfill the specific and essential function of a transfer, in particular creating the change in the financial and legal relationship between the parties.

Charges for Using Certain Payment Methods

Where a supplier supplies goods or services to a customer and charges an additional fee to accept payment via a specified method, e.g. credit card, this charge is not independent from the supply of goods or services and cannot qualify for VAT exemption.

The receipt of a payment and the handling of that payment are intrinsically linked to any supply of goods or services provided for consideration. It is inherent in such a supply that the provider should seek payment and make appropriate efforts to ensure that the customer can make effective payment in consideration for the goods or services supplied.

Please contact us if you require assistance with the above.

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