Archive for Claire McNamara

Vodafone Return of Value To Shareholders – Irish Tax Treatment

On 2nd September 2013, Vodafone Group Plc. announced that it was disposing of its 45% interest in Verizon Wireless to Verizon Communications Inc.

At the same time, it also announced its intention to carry out a “Return of Value” to its shareholders, of which there are almost 400,000 in Ireland. Many of these shareholders had acquired Vodafone shares in exchange for their Eircom shares in 2001. The “Return of Value” would be partly in cash and partly in Verizon consideration shares.

On 14th May 2014 the Irish Revenue Authorities issued a comprehensive Tax Brief outlining the tax treatment of the Vodafone Return of Value to its shareholders which provides comprehensive guidance on the calculation of the base cost for Capital Read More

Written by | Posted in Capital Gains • Europe, Middle East

VAT Consequences For I.T. Companies In Ireland – Part V

One of the biggest problems envisaged with the MOSS systems is identifying the location of the customer.

It is essential for suppliers to correctly identify the customer’s location/permanent address/usual residence so they can charge the correct VAT rate applicable in that member state.

For most telecommunication, broadcasting and electronically supplied services, it will be obvious where the customer resides. The decision about the place of supply of those services should be supported by two pieces of non-contradictory evidence including credit card details and a billing address for example. Read More

Written by | Posted in TaxConnections

VAT Consequences For I.T. Companies In Ireland – Part IV

What needs to be considered prior to the introduction of the MOSS Scheme on 1st January 2015 by businesses already established in Ireland or thinking about establishing in Ireland?

• It is essential to examine your contract to establish who exactly is paying you and if your customer is a taxable or non taxable person. This is particularly important in the context of undisclosed agents/commissionaire structures, etc.

• You must determine where your B2C customers are located. Your business may require additional contractual provisions and amendments to your systems to include this information.

• It is important to examine the impact of the different VAT rates in each E.U. member state Read More

Written by | Posted in Europe, Middle East • VAT

VAT Consequences For I.T. Companies In Ireland – Part III

From 1 January 2015, supplies of telecommunications, broadcasting and electronically supplied services made by EU suppliers to private, non-taxable individuals and non-business customers will be liable to VAT in the customer’s Member State.

The current place of supply/taxation is where the supplier is located, but from 1st January 2015 this will move to the place of consumption or the place where the consumer normally resides or is established.

Suppliers of such services will need to determine where their customers are established or where they usually reside. They will need to account for VAT at the rate applicable in that Member State. This is a requirement regardless of the E.U. state in which the Supplier is Read More

Written by | Posted in Europe, Middle East • VAT

VAT Consequences For I.T. Companies In Ireland – Part II

When we talk about “electronically supplied services” we mean:

• Website supply, web hosting, distance programme and equipment maintenance.

• Software supply and upgrades.

• Supply of distance teaching.

• Supply of film, games and music.

• Supply of artistic, cultural, political, scientific and sporting as well as entertainment broadcasts and events. Read More

Written by | Posted in Europe, Middle East • VAT

VAT Consequences For I.T. Companies In Ireland – Part I

For many businesses moving to Ireland, especially I.T. companies, a considerable amount of research and planning into our tax regime is usually carried out in advance. From experience, however, the question these companies rarely ask themselves is “what are the key VAT issues affecting our company if we locate to Ireland?

The current Irish VAT rules are as follows:

• The place of supply for businesses established in the E.U. who provide electronically supplied services to private consumers within the E.U. is the E.U. member state in which the supplier is established. For example, if an I.T. company established in Ireland supplies digital materials via the market to a private consumer living in France, the place Read More

Written by | Posted in Europe, Middle East • VAT

Taxation of Compensation And Damages

Over the years I’ve been asked many times how court settlements should be taxed. I’m still surprised by the number of people who are under the impression that a special tax for compensation and damages exists – it doesn’t.

In order to determine the correct tax treatment of damages and compensation it is essential to establish what the payment relates to.

There are several possibilities, the main ones being:

1. Personal Injury

2. Compensation for Revenue Loss Read More

Written by | Posted in Europe, Middle East • Tax Policy

Irish Tax Treatment of Contracts For Difference (CFD)

Recently I’ve received a number of queries relating to the Irish tax treatment of CFDs or Contracts for Difference. Although the information available is plentiful and appears to be straight forward, it’s important to be aware that each situation is different and as a result the tax treatment may vary considerably.

Firstly, what is a Contract for Difference?

Essentially it’s a contract between two parties i.e. the investor and the CFD Provider. At the close of the contract, the parties exchange the difference between the opening and closing prices of a specified financial instrument, including individual equities, currencies, commodities, market indices, market sectors, etc. In other words, two parties take opposing positions on the difference between the opening and closing value of a contract i.e. the price Read More

Written by | Posted in Europe, Middle East • Tax Policy

Ireland Post – Finance (No. 2) Bill 2013 – Part III

TaxConnections Blog PostFor the beginning of the Post, please see Part I.

There were a number of other budget changes which will have a huge impact on our economy:

One Parent Family Tax Credit

• The One Parent Family Tax Credit was replace by a new Single Person Child Carer Tax Credit.

• This takes effect from 1st January 2014.

• There is no change to the value of the credit or the additional standard rate band.

• The new credit will only be available to the principal carer of the child.

Medical Insurance Tax Relief

• The Bill restricted the Medical Insurance Tax Relief.

• The maximum amount of the Medical Insurance Premium which can qualify for relief at the standard tax rate will be €1,000 for an adult and €500 per child. Read More

Written by | Posted in Europe, Middle East • Tax Policy

Ireland Post – Finance (No. 2) Bill 2013 – Part II

TaxConnections Blog PostFor the beginning of the Post, please see Part I.

The construction and building sectors saw the introduction of welcome changes:

I LIVING CITY INITIATIVE – The urban regeneration initiative has been extended to include residential properties constructed up to and including 1914 and covers the cities of Cork, Dublin, Galway and Kilkenny.

The aim is to stimulate regeneration of retail and commercial districts as well as to encourage families to return to historic buildings in Irish city centres.

II HOME RENOVATION INCENTIVE – This is a new incentive for home owners who:

1. carry out repair, renovation or improvement work on their principal private residence

2. from 25th October 2013 to 31st December 2015.

3. Qualifying expenditure carried between 1st January 2016 and 31st March 2016 can be treated as having been incurred in 2015 if planning permission was granted before 31st December 2015. Read More

Written by | Posted in Europe, Middle East • Tax Policy

Ireland Post – Finance (No. 2) Bill 2013 – Part I

TaxConnections Blog PostOn 24th October 2013 the Finance (No. 2) Bill 2013 was published which confirmed the measures introduced by the Budget.

As the main priorities in Ireland at the moment are job creation and enterprise growth the following tax packages were introduced:

I. ENTERPRISE RELIEF – This is a new Capital Gains Tax relief which is aimed at entrepreneurs investing in assets used in new productive trading activities. The purpose is to encourage individuals to reinvest the sales proceeds from the sale/disposal of a previous asset into new productive trading or a new company. The main aspects of the relief are as follows:

(a) It applies to an individual

(b) who has paid Capital Gains Tax on the sale/disposal of an asset and

(c) invests in a new business

(d) at a cost of at least €10,000 Read More

Written by | Posted in Europe, Middle East • Tax Policy • VAT

VAT Changes In Ireland – Finance Act 2013 And Recent Case Law

VATFinance Act 2013 saw a number of changes to the VAT regime in Ireland.  The main changes are as follows:

1.  The threshold for Accounting for VAT on the money’s received basis has been increased from €1m to €1.25m with effect from 1st May 2013.
2.  The flat rate addition for unregistered farmers was reduced from 5.2% to 4.8% with effect from 1st January 2013.
3.  From 1st January 2013 the services threshold for VAT registration (i.e. if the turnover from the provision of services exceeds €37,500 there is an obligation to register for VAT) applies to the provision of sporting facilities and physical education facilities by public bodies.  This means that public authorities will not be obliged to register for VAT unless they exceed the threshold amount of €37,500 but they can elect to register for VAT if they so choose.
4.  Existing VAT legislation in relation to vouchers with a redeemable value provides that VAT arises at the time the voucher is supplied and not when the voucher is redeemed.  Anti Avoidance legislation was introduced in the 2013 Finance Act which confines this special rule to situations where vouchers are supplied to businesses that are established in the state.  For vouchers sold to businesses outside Ireland for onward supply they are not taxable on sale but when the redemption of the voucher takes place.
5.  The Finance Act brought in a number of changes with regard to receivers and liquidators in the context of supplies of services. 

a)      New provisions were introduced to clarify that a receiver or liquidator who supplies taxable services Read More

Written by | Posted in Europe, Middle East • Tax Policy • VAT
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