27th September 2022 | Business Plus

Bruce Stanley Tax Consulting Partner HLB Ireland

Tax Issues

The tax issues that impact on clients depend very much on their business sector and activities. For example, individual investors have been impacted by the change in guidance on US situated Exchange Traded Funds which has confused rather than clarified the tax treatment. Clients with international supply chains or customers based in the UK are still encountering new challenges in relation to VAT and Customs, where errors can be costly. Those in the construction industry are burdened by the Relevant Contracts Tax system, where mistakes can be harshly dealt with and the penalties rarely fit the crime. In particular, non-resident companies that operate in Ireland and are subject to RCT are often unaware of their obligations and, when RCT is operated, struggle to get the refunds from Revenue in a timely manner, putting their operations at risk and deterring them from entering the market again.

CAPITAL TAXES

High CGT rates negatively impact on the transfer of assets and also disincentivise individuals to take an investment risk. Corporate structures often play a major part in planning for CGT events, particularly for trading companies. Due to high CGT rates, clients are frequently looking to explore the implications around moving their tax residency to a more favourable tax jurisdiction. Our gift tax rates are also very unfavourable.

CORPORATE TAX

Tax policy needs to be more sympathetic to Irish-owned businesses. Awareness of the start-up relief for new companies is often overlooked, and the R&D tax credit is regularly not claimed by SMEs due to the high level of compliance and regulation required to support a claim.

EXIT RELIEFS

In our experience, most business owners have an awareness of Entrepreneur Relief and Retirement Relief, certainly at a high level. However, they are often not aware of the potential pitfalls, such as holding investment assets within a company, having dormant subsidiaries or ceasing to trade prior to appointing a liquidator. As always, we recommend seeking professional advice from an expert who will know the hurdles to look out for.

If you would like to speak to any of our advisors about the services we offer, please contact us today. We'd be glad to hear from you.