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Covid-19 Irish Revenue Response 24 March 2020

  • Written By: Michael McGivern
  • Published: Wed, 25 Mar 2020 16:34 GMT

Revenue – Covid 19 - actions and supports

Reporting Colour 590291639

Announcements in relation to Covid-19

We emphasise the importance of documenting in real time all Covid-19 decisions taken by an individual or a business which may have tax implications in any of the areas outlined in this overview. 
In our view, it is good practice to document both the prevailing Covid-19 conditions giving rise to decision taken, in addition to documenting the decisions themselves, and it should considerably assist in demonstrating the bona fide nature of the Covid-19 decisions taken, in the event of further scrutiny by Revenue when normal business resumes. 

If we can be of assistance in relation to any aspect or area outlined below, or if you have any other tax related queries, please don’t hesitate to contact Michael McGivern, or your usual Smith & Williamson tax contact.

Please note that Government and tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice from their financial adviser before making financial decisions.

The following information is sourced from Revenue.ie (24 March 2020)
Revenue has announced some new measures and provided more detail around previously announced measures in relation to the above. These are set out below.

1. Temporary COVID-19 Wage Subsidy Scheme
  • On 24 March 2020 the Government announced new measures to provide financial support to Irish workers affected by Covid-19.
  • As part of these measures, Revenue will operate a Temporary Wage Subsidy Scheme. The scheme, enables employees, whose employers are affected by the pandemic, to receive significant supports directly from their employer.
  • The scheme is currently expected to last 12 weeks from 26 March 2020, with draft legislation expected shortly.
  • The Temporary Wage Subsidy Scheme will be available to all employers who keep employees on the payroll throughout the COVID-19 pandemic. The expectation being that this will result in employers retaining links with employees for when business picks up after the Covid-19 situation.
  • Additionally, the operation of the scheme by Revenue should reduce the burden on the Department of Employment Affairs and Social Protection (“DEASP”) which is dealing with the other Covid-19 related payments.
  • Revenue is encouraging employers to operate the scheme, by retaining employees on their books and by making best efforts to maintain a significant, or 100% income, for the period of the scheme.
  • The key features of the scheme are:
    • It replaces the previously announced COVID-19 Refund Scheme.
    • Initially, and from 26 March 2020, the subsidy scheme will refund employers up to a maximum of €410 per each qualifying employee. However, employers should pay no more than the normal take home pay of the employee.
    • The subsidy scheme applies to employers who top up employees’ wages and those that aren’t in a position to do so.
    • Employers make this special support payment to their employees through their normal payroll process.
    • Employers will then be reimbursed for amounts paid to employees and notified to Revenue via the payroll process.
    • The reimbursement will, in general, be made within two working days after receipt of the payroll submission.
    • In April, the scheme will move to a subsidy payment based on 70% of the weekly average take home pay for each employee up to a maximum of €410, with details being made available by Revenue in due course.
    • Income tax and Universal Social Charge (USC) will not be applied to the subsidy payment through the payroll.
    • Employee Pay Related Social Insurance (PRSI) will not apply to the subsidy or any top up payment by the employer.
    • Employers PRSI will not apply to the subsidy will be reduced from 10.5% to 0.5% on the top up payment.

  • The scheme applies to the following cohort:
    • The Scheme is available to employers from all sectors (excluding the public service and non-commercial semi-state sector) whose business activities are being adversely impacted by the COVID-19 pandemic.
    • The scheme is available for employers who retain staff on payroll; some of the staff may be temporarily not working or some may be on reduced hours and/or reduced pay. Provided the employer meets the conditions set out below and subject to the levels of pay to the employees the employer may be eligible for the scheme for some or all of the employees.
  • To qualify for the scheme, employers must
    • Be experiencing significant negative economic disruption due to Covid-19
    • Be able to demonstrate, to the satisfaction of Revenue, a minimum of a 25% decline in turnover
    • Be unable to pay normal wages and normal outgoings fully, and
    • Retain their employees on the payroll.
  • It should be noted that the scheme is confined to employees who were on the employer’s payroll as at 29 February 2020, and for whom a payroll submission has already been made to Revenue in the period from 1 February 2020 to 15 March 2020.
  • The names of all employers operating this scheme will be published on Revenue’s website in due course, after the scheme has expired.
  • In terms of registering for the Temporary Wage Subsidy Scheme:
    • Any employer, already registered with Revenue for the purposes of the Employer COVID-19 Refund Scheme, is not required to take any further action. The employer may make payroll submissions from 26 March 2020 under the subsidy scheme arrangements on the same basis as they were doing for the Employer Refund Scheme, and €410 will be refunded in respect of each eligible employee per week.
    • Employers, or their agents, wishing to register for the scheme can apply to Revenue by carrying out the following steps:
      • Log on to Revenue Online System (ROS) myEnquiries and select the category ‘Covid-19: Temporary Wage Subsidy’.
      • Read the “Covid-19: Temporary Wage Subsidy Self-Declaration” and press the ‘Submit’ button.
      • Ensure bank account details on Revenue record are correct. These can be checked in ROS and in ‘Manage bank accounts’, ‘Manage EFT’, enter the refund bank account that the refund is to be made to.
  • In relation to operating the scheme from Thursday 26 March 2020:
    • The employer should run the payroll as normal, entering the following details for each relevant employee under the Scheme:
      • PRSI Class set to J9.
      • A non-taxable amount equal to the employee’s net take home pay or €410 whichever is the lesser.
      • If an employer is not making any payment to the employee, they should include a pay amount of €0.01 in Gross Pay.
      • If an employer is making additional wage payments to affected employees, they should include this amount in the Gross Pay.
      • It is important that employers do not include the Temporary Wage Subsidy payment in Gross Pay.
      • The payroll submission must include pay frequency and period number.
    • Income tax, USC, Local Property Tax (LPT), if applicable, and PRSI are not deducted from the Temporary Wage Subsidy.
    • In many cases the payment of the Temporary Wage Subsidy and any additional income paid by the employer will result in the refund of Income Tax or USC already paid by the employee.
    • Any Income Tax and USC refunds that arise as a result of the application of tax credits and rate bands can be repaid by the employer and Revenue will also refund this amount to the employer.
  • Employers must not operate this scheme for any employee who is making a claim for duplicate support (e.g. Pandemic Unemployment Payment) from the DEASP.
  • Based on the information provided in payroll submissions and adherence to the maximum limits, described above, Revenue will credit employers with the temporary wage subsidy paid to each employee.
  • Penalties will apply to any abuse of the Subsidy Scheme by self-declaring incorrectly, not providing funds to employees or non-adherence to Revenue, and any other relevant, guidelines.
  • In relation to general guidance and information from Revenue, they advise as follows:
  • For general issues relating to the scheme, employers should contact Revenue’s National Employer Helpdesk via the myEnquiries system, providing details of the query and a direct dial contact number.
  • Employers should make sure to select ‘Employer’s PAYE’ and then ‘Employer’s PAYE General Enquiry’ when submitting the query through myEnquiries.
2. Revenue services

Revenue advises as follows in relation to ongoing contact with Revenue:

  • Online services - The quickest, easiest and most convenient way for taxpayer to manage their tax is by using our online services. These wide-ranging services are available 24/7 meaning that many taxpayer interactions can continue uninterrupted.
  • Correspondence - Correspondence continues to be dealt with as normal. Revenue strongly encourages taxpayers, and agents to contact Revenue using Revenue’s secure online MyEnquiries facility, rather than by telephone or post, where possible.
  • Telephone Service – Revenue’s telephone services continue to operate as normal, subject to the services* outlined below. Additional resources have been added to the National Employer Helpline to match increased demand.
  • The eCustoms Helpdesk and Tariff Classification Unit are currently processing all queries via email. The relevant details are as follows:
    • eCustoms Helpdesk: ecustoms@revenue.ie or via My Enquiries. It is important that the transaction ID (if available) is included in the correspondence.
    • Tariff Classification: tarclass@revenue.ie. It is important to include all relevant information so that the Classification Unit can provide you with a prompt reply.
  • Binding Tariff Information requests will continue to be processed electronically via the European Commission’s Trader Portal for electronic Binding Tariff Information system.
3. Repayments/Refunds
  • Revenue advises that it will continue to prioritise the approval and processing of repayments and refunds, primarily VAT repayments and PSWT refunds, to taxpayers.
  • Where checks are necessary to allow repayment/refund claims, Revenue advises that they will be conducted through our My Enquiries service or by telephone. However, this firm has ongoing instances of Revenue continuing to issue hard copy letters seeking to verify refund claims. Therefore, be sure to continue to monitor the receipt of your regular mail and do not just rely on My Enquiries in relation to the receipt of correspondence from Revenue.
4. Compliance Interventions
  • Revenue advises that in general, it has suspended audit and other compliance intervention activity on taxpayers’ premises until further notice.
  • Where possible, Revenue will continue to engage with businesses to finalise open interventions through MyEnquiries or by telephone. However, if it is not possible to give priority to this work in the current circumstances, Revenue advises that it will respond positively to businesses where this is the case.
5. Filing Tax Returns
  • Revenue advises that taxpayers (individuals and businesses) should continue to file their tax returns even if payment of the resulting liabilities, in whole or in part, is not possible.
  • Revenue goes on to advise that where, due to Covid-19, key personnel that compute tax returns are unavailable, Revenue strongly advise that the relevant return is submitted on a “best estimate” basis.
  • Finally, Revenue advises that the application of a surcharge for Corporation Tax returns (CT1s) for accounting periods ending June 2019 onwards (i.e. due by 23 March 2020 onwards) is suspended until further notice.
6. Tax Payment Queries
  • In relation to specific tax payment queries, Revenue advise as follows:
    • For specific queries on payments please continue to submit your query through My Enquiries selecting the following:
      • For ‘Enquiry relates to’: Select ’Other than the above’ from the drop-down menu.
      • For ‘More specifically’: Select ‘Revenue On-Line Service (ROS) Payments’ from the drop-down menu.
      • Please enter details of your enquiry (maximum 2,000 characters).
    • Alternatively, it is possible to contact the Collector General’s office on +353 1 738 3663.
7. Variable Direct Debit – Notice for Employers’ Income Tax/PRSI/USC/LPT payments
  • In relation to variable direct debits, Revenue advises as follows:
    • Routinely, payments for Employer Income Tax/PRSI/USC/LPT are debited on the third last working day of each month for both Fixed Direct Debit and Variable Direct Debit payments.
    • However, where a variable direct debit fails due to insufficient funds, Revenue has suspended the process of issuing a further request for the payments until further notice.
    • Should an employer wish to make a payment after the third last working day, they can avail of other online payment facilities. This temporary suspension will come into effect for March 2020 Variable Direct Debit payments.
    • Employers should continue to report their payroll details each month to ensure that the filed/deemed return is accurate.
8. Debt Management
  • Revenue advises taxpayers “to pay tax liabilities if at all possible” while going on in the same sentence to recognise that tax payment difficulties are an inevitable impact of the COVID-19 pandemic.
  • Revenue advises of the following measures being in place to assist taxpayers who are experiencing tax payment difficulties:
    • All debt enforcement activity is suspended until further notice
    • The application of interest on late payments is suspended for all SME businesses in respect of January/February VAT and both February and March PAYE (Employers) liabilities
    • Businesses, other than SMEs, who are experiencing difficulties in paying their tax liabilities should contact the Collector-General’s office on +353 1 738 3663. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division.
    • For the above purposes, Revenue regards an SME as a business with turnover of less than €3m which is not dealt with by either Revenue’s Large Cases Division or Medium Enterprises Division, and that SMEs are managed from both a service and compliance standpoint by Revenue’s Business Division.
  • Revenue advises that it will continue to issue updated guidance to businesses in good time before future returns are due.
  • Finally, Revenue goes on to make the following general comments:
    • It refers to the importance of businesses “who may be facing difficulty in paying their taxes for the first time” being aware that Revenue will work with them to resolve their tax payment difficulties.
    • It advises that with early and meaningful engagement, Revenue can generally agree payment arrangements that are acceptable to both the business and Revenue.
    • It highlights that businesses can apply for a Phased Payment Arrangement by contacting the Collector-General’s office on +353 1 738 3663 or by using Revenue’s Online Phased Payment Facility, and that this online facility is available 24/7 and affords businesses considerable flexibility to self-manage their tax payment schedule in line with business needs or temporary cash flow challenges.
  • We would emphasise that irrespective of whether or not a business is an SME as defined above, if it is experiencing cash flow difficulties arising from Covid-19, it is vital that the business contacts Revenue as quickly as possible. Particularly in the case of a non-SME, simply deciding not to make a payment and not contacting Revenue is not an advisable approach.
9. Other tax issues
  • Local Property Tax (“LPT”) - For property owners who opted to pay their LPT for 2020 by Annual Debit Instruction or Single Debit Authority payment, the deduction date will change from 21 March 2020 to 21 May 2020.
  • Importing goods - Critical pharmaceutical products and medicines will be given a Customs “green routing” to facilitate uninterrupted importation and supply.
  • Compliance with certain reporting and filing obligations and the satisfaction of certain other tax related conditions.
  • Relief from Excise Duty APT (Alcohol Products Tax) for the manufacture of hand sanitiser products:
  • A relief from APT will continue to apply to alcohol used in the production of a range of medicinal and other products, such as hand sanitisers.
  • To benefit from this relief, producers must apply to Revenue to be authorised to receive alcohol for this purpose.
  • The production of hand sanitiser products must be approved by the Department of Agriculture, Food and the Marine before being made available for sale or use. See: http://www.pcs.agriculture.gov.ie/
10. Compliance with certain reporting and filing obligations and the satisfaction of certain other tax related conditions
  • On a general note, Revenue advises that in all cases where restrictions imposed by COVID-19 affect the applicability of Irish tax legislation on an employee/employer’s tax position, records should be maintained outlining the circumstances and should be available to Revenue on request.
  • Revenue then goes on to make the following specific comments:
    • Real-time foreign tax credit (FTC) for Restricted Stock Unit (RSU) cases:
      • In respect of 2019 cases for whom real time foreign tax credits were provided through the 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.
    • Share schemes filing obligations:
      • The filing deadline for all 2019 share scheme returns is being extended from 31 March 2020 to 30 June 2020.
    • Special Assignee Relief Programme (SARP):
      • The 90 day employer filing obligation, which is a requirement for an employee to be eligible to benefit from SARP relief, is 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.
    • Trans-Border Workers Relief:
      • If employees are required to work from home in Ireland due to COVID-19, such days spent working at home in Ireland will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met.
    • PAYE Dispensation Applications:
      • Given the unprecedented circumstances and the restrictions on travel as a consequence of COVID-19, Revenue will 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 Ireland in a tax year.
    • Foreign Employments - Operation of PAYE:
      • 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 Ireland during the COVID-19 period and performs duties for his or her foreign employer while in Ireland.
    • PAYE Exclusion Order - Irish Contract of Employment:
      • 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 will not be adversely impacted where the employee works more than 30 days in the State due to COVID-19.
    • Residence rules - Force Majeure circumstances:
      • Existing guidance states that where an individual is prevented from leaving Ireland 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 Ireland for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in Ireland on that day due only to “force majeure” circumstances.
      • Revenue advises 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.
    • Benefit in Kind (BIK):
      • Tax treatment of reimbursements by an employer to an employee regarding holiday/flight cancellations or in relation to costs of assisting employees returning to Ireland:
        • Provided the employee is integral to the business and was required to return to deal with issues related to the COVID-19 crisis by his or her employer, the costs incurred are reasonable and the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider), a BIK will not arise.
        • This may include costs related to family members who were on holiday or due to go on holidays with the employee.
      • Employer provided equipment:
        • A BIK will not arise 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.
    • e-Working and Tax:
    • Payment of taxi fares:
      • Where an employer pays for a taxi to transport an employee to or from work due to health and safety concerns, BIK will not apply for the duration of the COVID-19 period only.
11. Corporation Tax and presence in Ireland or outside Ireland resulting from COVID-related travel restrictions
  • Where an individual is present in Ireland and that presence is shown to result from travel restrictions related to COVID–19, Revenue will be prepared to disregard such presence in Ireland for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.
  • In addition, and where relevant, if an individual is present in another jurisdiction as a result of COVID-related travel restrictions, and would otherwise have been present in Ireland, Revenue will be prepared to disregard such presence outside Ireland for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.
  • The individual and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in Ireland or outside Ireland, for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.

Ref: 45620lw

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