MINUTES OF THE MEETING OF THE TAXATION ADMINISTRATION
LIAISON COMMITTEE – “MAIN TALC” HELD ON 9th December, 2005
Attendance:
Law Society
Caroline Devlin, Chairperson
Patrick Bradley
Revenue
Liam Irwin
Eamonn O’Dea
Gerry Harrahill
Michael Gladney
Denis Graham
CCAB-I
Marie Barr
Brian Purcell
Brian Keegan
Irish Taxation Institute
Adrian Sherlock
Kenneth McMoreland
With
Apologies:
Item Number 1:
Colette Carey (Law Society) (Secretary)
Norman Gillanders
Enda Faughnan
Gerald Murphy
Cora Murray
Margaret Sheridan
Agree Minutes from May 2005 meeting.
The Minutes of the meeting held on 13th October, 2005 were approved subject to a
number of amendments.
Item Number 2:
Budget Statement 2006
Restriction on the use of Tax Reliefs by High Income Taxpayers: Practitioners were
concerned that this measure may have an adverse impact on inward investment and may
lead to difficulties in respect of transactions already in place.
“Remittance basis” changes: Practitioners expressed concern as to how this would
operate, and the potential impact on inward investment into Ireland. Revenue responded
by stating that the measure was introduced in response to the increasingly widespread use
of the measure and to counteract a number of high profile cases where the system had
been abused.
Abolition of CGT exemption between spouses: Revenue confirmed that this measure is
intended to focus on situations where one of the spouses is non-resident.
Pensions: Practitioners queried whether the maximum allowable pension fund limit of
€5m is applicable to self-administered schemes only. Revenue advised that the limit will
cover all schemes. Revenue confirmed that whilst no decision has yet been made as to
how ‘defined benefit’ and public service schemes will be valued, a practical approach
will be adopted and the use of actuarial valuations, where appropriate, could be a
possibility. Practitioners referred to the matter of transitional provisions for persons who
have elected to take a lump sum but payment out has not yet been made.
Abolition of tax relief on loans to acquire shares in Property Rental Income Companies:
Practitioners voiced concern regarding the impact of this measure on those who had
entered into binding contracts prior to the abolition of the relief, both in respect of the
acquisition of shares in such companies and also in relation to funding, but had not yet
finalised a drawdown of the relevant loan. Practitioners pointed out that in similar
situations that had arisen previously, transitional arrangements had been put in place.
Practitioners will provide further details to the Department of Finance.
Tax relief on Donations to Approved Bodies: The extension of the relief to include
publicly quoted securities was welcomed but it was suggested by Practitioners that this
might be extended to include stamp duty on the transfers of such shares, and indeed on
transfers of all property, not just land, to charities.
Heritage properties: Practitioners consider that whilst the €6m threshold is sufficient
where artwork and similar objects are concerned, it is too low for donations of real
property.
Quoted eurobond securities: It was noted that the budget statement contained no
provisions in this regard with regard to dropping the requirement for such securities to be
in bearer form, and practitioners expressed the hope that the matter might be addressed in
the Finance Bill.
PAYE/PRSI quarterly payments – increase in tax payment limit: Practitioners were of the
view that, although the tax payment limit below which these taxes can be paid on a
quarterly, rather than a monthly basis, was raised to €30,000, it is still too low. Revenue
systems will automatically issue on a quarterly basis but there will be an ‘opt out’
arrangement. Revenue suggested that if employers assess their likely liabilities, this
should act as a trigger for those who should change over. Revenue advised that on a
phased basis from 1 April next relevant employers will be able to make their PAYE/PRSI
payments quarterly rather than monthly. Starting in February, Revenue will be contacting
each eligible employer to advise them of their new payment arrangements. Employers
will be able to opt out of the quarterly payment arrangement if they so wish.
Item Number 3:
Aiding & Abetting Provisions (s.1078 TCA 97)
Practitioners will wait to see what issues emerge with the passage of time and will
reactivate the matter, as necessary. It was agreed that the matter should be deleted from
the agenda.
Item No 4
Audits
Privileged information: Practitioners said that a very helpful clarification had been
issued at the TALC Audit sub-Committee meeting in this regard, which it would be
useful to have noted at Main TALC. However, Revenue indicated that it would be
necessary to make further enquiries in this regard and it was agreed that the matter should
be carried forward.
2002 Revenue Code of Practice for Audits: Practitioners said that recent statements
from Revenue in relation to Revenue investigations were at odds with practitioners’
understanding of the Revenue position. Revenue responded that the particular statement
was made in a specific context, i.e. large projects. The Code refers to the different types
of enquiries that Revenue may make and it was not the intention that the Code would
preclude Revenue from unannounced inspections, for example, invoice checks. Revenue
undertook to make further enquiries for the purposes of clarification.
Sectoral Audits: It was agreed that this matter should be deleted from the agenda.
Item 5
Techical Matters
Application of Corporation Tax Surcharge: Revenue and Practitioners discussed the
anomalies between the CT1 and the legislation, however Revenue indicated that the underlying
difficulty lies with the legislation and therefore Revenue is constrained in what it can do to
address the issue in the context of the CT1.
Item 6
Tax Briefing
Article on CGT payments/Solicitors’ undertakings: Practitioners asked that Revenue
advise representatives on TALC in advance when it is intended to announce
administrative changes affecting Practitioners, in Taxbriefing. Such an announcement had
recently been made in relation to the circumstances in which solicitors’ undertakings
would be accepted by Revenue. The Law Society will examine the changes and revert to
Revenue if necessary.
Practitioners said that it is vitally important that the phraseology used in Taxbriefing be as
clear as possible as otherwise, issues of interpretation will undoubtedly arise.
It was
noted that Revenue has started a project to build up the Taxbriefing publication on the
web.
Item 7
Issues arising/carried over from previous meetings
Single Premium Insurance Policies: Revenue confirmed that all letters had issued by
the end of October.
LCD Co-operative Compliance Framework: Revenue advised that 23 companies are
participating in the scheme.
IFRS Group: Expanded guidelines will be published shortly.
Item 8
Revenue Customer Services Issues
Telephone/Correspondence Service: Revenue said they were aware that significant
numbers of callers had experienced difficulties in using the 1890 telephone number and
they are doing everything possible to resolve the problem. Some districts had closed off
the use of the 1890 number in the afternoon and practitioners suggested that it would be
helpful if these particular offices could be ‘flagged’ so that practitioners could plan
around the hours of operation.
Tax Registration Delays: Practitioners reported that there has been no improvement in
delays in registration, which are now running at 8-10 weeks in some districts and up to 12
weeks in others. There are also delays around the country generally. Revenue said that
this is not reflected in its figures. Practitioners also said that in some instances,
documentation was returned to them after 12 weeks, with a direction that it be sent
elsewhere. Practitioners will provide specific examples to Revenue.
Technical resources - update on training programme: Revenue reported that the
programme is progressing satisfactorily and the next stage will be rolled out before
Christmas. Practitioners suggested that it would be useful if Revenue could let them
know the areas in which training will be provided. Revenue confirmed that training will
cover all taxes but suggested that practitioners should write to Revenue setting out the
matters/areas where they consider training to be a priority.
Item 9
ROS Issues
Electronic Filing of Inland Revenue Affidavit: There was no progress to report under
this heading but it was agreed that it should remain on the agenda.
Electronic Filing – Level of service: Revenue said that approx. 63% of income tax
returns had been made via ROS and approx. 90% of agent filing is through ROS.
Revenue is enquiring into the intermittent difficulties with the level of service which were
experienced on the 18 November and will endeavour to ensure that this does not recur.
Revenue had contacted the practitioner bodies to give assurances that taxpayers would
not be disadvantaged or penalised in any way as a result of being unable to access the
system. Practitioners queried what the extension for ROS filing would be for 2006 but
Revenue advised that this has not yet been decided. Practitioners mentioned that in the
case of returns filed through ROS where refunds arise, one region is now asking for
unnecessary amounts of documentation in all refund cases. Revenue suggested that the
matter be addressed locally.
Item 10
Operational Issues
Accessing e-brief: Nothing arose under this heading.
Use of non-standard payment documents: Nothing arose under this heading.
PAYE Re-organisation: Enhancements to the internal operation of the PAYE system
within Revenue had been implemented in mid-October. Further enhancements will be
carried out in March and the new on-line service for PAYE will be highlighted through a
publicity campaign to be launched in February. The system will allow taxpayers to view
tax credits and other details on-line and will provide access to a range of other features
such as applying for re-allocation of tax credits, seeking a PAYE review or tracking the
progress of correspondence with Revenue. Tax Credit Certs will in future include a PIN
number for use with the on-line service and will be furnished to self-assessment taxpayers
also. Revenue confirmed that audits will become more of a feature of the PAYE system.
Work is continuing on the Form 11. No timescale has been set as yet for the filing of
Form 12 through ROS. Practitioners queried whether it might be possible to register for
taxes (other than VAT) via ROS as this would cut down on delays. Revenue agreed that
this would be extremely useful.
Savings Directive – availability of hard copy of Return: Revenue confirmed that the
form is ready and will be made available through the VIMA Office, Dundalk.
Issuing of Form SA1 directly to taxpayers: Practitioners queried why a particular
Region had issued the form. Revenue responded that a particular Region had decided to
run a campaign on the issue. However, Revenue acknowledged that agents should have
been notified. Revenue confirmed that the issue of the form does not constitute an audit
notification. It was agreed that the matter should be referred to the TALC Audit subCommittee agenda.
Item 11
Updates from TALC sub-Committees
Indirect Taxes sub-Committee: The minutes of the September meeting of the subCommittee were noted.
Simplification Group: The minutes of the October meeting of the Group were noted. A
further meeting had been held on 8th December, the minutes of which will be circulated in
due course.
Technical Tax Issues Committee: It was agreed that it would be helpful if the
Committee had a secretariat to support the work of the Committee.
Capital Taxes sub-Committee: It was noted that the nominations from the practitioner
bodies remains to be finalised.
ITEM 12
A.O.B.
The Chairman, Ms. Caroline Devlin, highlighted some of the issues which had appeared
on the Committee’s agenda during the year. Whilst no single ‘big’ issue had dominated
the business of the Committee, significant progress had been made on a range of matters.
Ms. Devlin thanked the members for their interest and support throughout the year and
thanked Committee Secretary, Colette Carey, for her assistance. Ms Devlin said she
wished the incoming Chairman, Mr. Ken McMoreland, every success in the forthcoming
Committee year.
Mr. McMoreland thanked Ms. Devlin and said that, as the year ahead is likely to be a
busy one, the Committee might perhaps consider whether additional meetings would be
necessary in 2006 and whether some issues might be delegated to TALC subCommittees.
Ms. Marie Barr thanked the Chairman and Secretary for their work throughout the year
and welcomed Mr. McMoreland as Chairman for 2006.
Mr. Liam Irwin also thanked the Chairman and Secretary and said he looked forward to
working with Mr. McMoreland and the members in the year ahead.
DATE OF NEXT MEETING: To be agreed