Connecting to LinkedIn...

Blank

Irish Revenue attack on personal service companies! its international Highlights Concerns

Irish Revenue attack on personal service companies! its international Highlights Concerns

From standard, spot-check reviews of annual tax returns, Tax Inspectors in the Cork region of Ireland have discovered erroneous claims for tax deductions by local and expatriate contractors operating through their own Irish limited companies.  This subsequently triggered a decision by the Revenue Commissioners to mount an ongoing Revenue Audit project in that part of Ireland.  We understand the project will shortly be expanded nationally because the Irish Revenue has identified a major source of tax loss relating to false, exaggerated and unsubstantiated expense claims.  Typically, the Revenue is looking back over a 5 year period!

The Revenue Commissioners appear to be paying closer attention to the annual Form 46G (Payments to Third Parties) submitted by end users of contractor services in Ireland.  The form names all third party recipients including foreign recruiters.  This could be the route adopted by Irish Revenue Inspectors to uncover expatriates operating through foreign personal service companies which may not be structured in line with Irish law.  

The Revenue Commissioners are currently maintaining their courteous approach to uncovering miscreants.  They are likely to target key industries.  They will openly and politely invite contractors to firstly review their past tax returns and current approaches to determining tax deductable expenses and, secondly, to settle any outstanding tax and due financial penalties in line with Irish law.  As chain law has yet to be adopted by Ireland’s tax authorities, there is no immediate financial risk to recruiters other than possible reputational loss from unhappy end users.  However, the growing trend across Europe by governments to introduce (e.g. the UK) and widen (e.g. Germany) retrospective legislation may well encourage recruiters to more forcibly require their contractors to deal with their tax affairs more appropriately.

Tags:

Articles similar to

Articles similar to