Covid Tax Easements

Pandemic

On 12 March, an Taoiseach, Leo Varadkar TD, announced the closure of schools, childcare facilities, colleges, and State-run cultural institutions, and recommended the cancellation of mass gatherings until 29 March.

On 15 March, the Government also recommended the closure of all pubs until the same date and emphasised the need for the continued use of social distancing. Many non-essential businesses have closed and this is expected to lead to a dramatic loss of jobs, particularly across the bar, restaurant, hospitality and retail sectors.

Revenue Reliefs

On 13 March 2020, the Irish Revenue Commissioners (“Revenue”) published their first set of COVID-19 related measures and guidance to taxpayers affected by the outbreak of COVID-19. Since then, they have been providing almost daily updates on their measures. Initially, certain of the measures and guidance aimed to assist  only SMEs1, however, some of the measures have since been extended to all businesses affected by COVID-19.

Revenue’s published guidance to date includes the following measures relevant to SMEs and other businesses:

Businesses experiencing temporary cash flow difficulties should continue to file tax returns on time.  The application of a surcharge for corporation tax returns for accounting periods ended 30 June 2019 onwards (due by March 23 onwards) was suspended.

Payment Reliefs

The application of interest on late payments of tax was suspended for January/February VAT (generally due on or before 19 March) and both February and March PAYE (Employers’) liabilities (generally due on or before 14 March and 14 April respectively) for SMEs.

Businesses could ontinue to avail of Revenue’s online phased payment facility.  Viable businesses affected by COVID-19 were encouraged to use the online service, which is available 24/7, to apply for a phased payment arrangement.

All debt enforcement activity by Revenue was suspended until further notice. Current tax clearance status – which was generally determined by reference to a business’ tax compliance record – would remain in place.

Where a variable direct debit fails due to insufficient funds, Revenue suspended the process of issuing a further request for the payments until further notice.  Payments for employer income tax, PRSI (social insurance), universal social charge and local property tax are routinely debited on the third last working day of each month for both fixed and variable direct debit payments.

Pharmacy Products & Customs

Critical pharmaceutical products and medicines were given a customs ‘green routing’.  The result is that no examination of the goods or documentation supporting the declaration is required, which should facilitate uninterrupted supply.

Residence

Guidance in respect of personal tax residency and corporation tax liability affected by COVID-19 has been issued. It has been confirmed that where a departure from Ireland is prevented due to COVID-19, Revenue will consider this ‘force majeure’ for the purpose of establishing an individual’s tax residence position.

Existing guidance states that where an individual is prevented from leaving the State on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action – none of which could reasonably have been foreseen and avoided – the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances.  Where a departure from the State is prevented due to COVID-19, Revenue will consider this ‘force majeure’ for the purpose of establishing an individual’s tax residence position.

Revenue also confirmed that, if as a result of COVID-19 related travel restrictions, an individual  was present in Ireland (or present in another jurisdiction but would otherwise have been present in Ireland) they are prepared to disregard such presence in Ireland (or the other jurisdiction as the case may be) for corporation tax purposes for a company in relation to which the individual in question is an employee, director, servicer provider or agent.  Revenue have stressed that the individual and the company should maintain a record of the facts and circumstances of the bona fide presence in Ireland, or outside Ireland, for production if required at a later date.

Other Taxes

The annual local property tax payment date for those who pay in full and in a single payment was 21 March 2020.  However, Revenue have announced that the deduction date would change to 21 May 2020.  No action was required to be taken by taxpayers to effect this change.  Monthly direct debit payments, which are on the 15th of each month, are currently scheduled to continue as normal.

Stamp duty on credit cards was not to be collected until 1 July 2020.  Generally, financial institutions collect the stamp duty from credit card accounts on 1 April each year. The stamp duty due on credit cards is €30 per year per credit card account.  Individual credit card account holders do not need to take any action. The collection date will be changed automatically by financial institutions.

Working from Home

On 20 March, Revenue issued guidance on the concept of “e-working”. The guidance acknowledged that e-workers would incur certain expenditure in the performance of their duties from home, such as additional heating and electricity costs. Revenue allows an employer to make payments up to €3.20 per day to employees who satisfy the conditions for the relief, without deducting PAYE, PRSI, or USC. Amounts in excess of €3.20 paid by the employer should be subjected to tax.

The guidance confirmed that employees working from home as a result of Government guidelines related to COVID-19 are eligible for the treatment. Where an employee does not receive payment from an employer they can make a direct claim to Revenue.

If employees are required to work from home in the State due to COVID-19, such days spent working at home in the State will not preclude an individual from being entitled to claim trans-border workers’ relief, provided all other conditions of the relief are met.

Share Options

In respect of 2019 restricted stock unit (RSU) cases for whom real time foreign tax credits were provided through payroll, the 31 March 2020 filling deadline will be suspended.  In such circumstances, the 2019 income tax return for such employees will revert to the standard income tax filing date (31 October 2020) for that return or any extended filing deadline for that return as appropriate.

The employer notification to Revenue in relation to such cases should be made as soon as possible but no later than the extended income tax filing date where applicable.

The filing deadline for all 2019 share scheme returns was extended from 31 March 2020 to 30 June 2020.

PAYE

The 90 day employer filing obligation, which is a requirement for an employee to be eligible to benefit from Special Assignee Relief Programme relief, wAs extended for a further 60 days. It is anticipated that such an extension should provide sufficient time for employers to file the required return, but exceptional cases may be submitted to Revenue for consideration on a case by case basis.

Given the unprecedented circumstances and the restrictions on travel as a consequence of COVID-19, Revenue did not strictly enforce the 30 day notification requirement for PAYE dispensations which is applicable to short term business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 workdays in the State in a tax year.

Revenue will not seek to enforce Irish payroll obligations for foreign employers in genuine cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocates temporarily to the State during the COVID-19 period and performs duties for his or her foreign employer while in the State.

Regarding employees who are working abroad for a foreign employer under an Irish contract of employment where a PAYE exclusion order is in place, the position would not be adversely impacted where the employee works more than 30 days in the State due to COVID-19.

BIK

A taxable benefit in kind (BIK) would not arise in respect of reimbursements paid by an employer to an employee regarding holiday/flight cancellations or in relation to costs of assisting employees returning to the State provided:

• the employee is integral to the business;
• s/he was required to return to deal with issues related to the COVID-19 crisis by his/her employer;
• the costs incurred are reasonable; and s/he is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider).

This may include costs related to family members who were on holiday or due to go on holidays with the employee.  Furthermore, a BIK will not arise for the duration of the COVID-19 period only where:

• employers provide equipment such as laptops, printers, scanners and office furniture in order for employees to set up a working space in their homes; and/or
• where an employer pays for a taxi to transport an employee to or from work due to health and safety concerns.