You can be resident, ordinarily resident, domiciled or any combination of the three.
If you are resident and domiciled in Ireland for tax purposes, you are chargeable to tax in Ireland on your worldwide income. Worldwide income is the total income that you earn anywhere in the world in a tax year. This is subject to any relief due under the terms of a relevant Double Taxation Agreement.
2021 Budget introduced a new support scheme for businesses impacted by COVID-19 restrictions. The abbreviation for the scheme is CRSS and the full name is COVID Restrictions Support Scheme. The CRSS scheme provides support for businesses directly affected by the Level 3 or higher restrictions prohibiting or restricting customers’ access.
The sectors mainly impacted by the recent Level 3 restrictions are:
- Accommodation,
- Food
- Arts
- Recreation and
- Entertainment.
If the Government will decide to move the Level of restriction at 4 or 5 other sectors of the economy will qualify as well for the CRSS scheme.
Minister for Finance Paschal Donohoe said yesterday in his speech that he is “…very conscious that there are many sectors in our economy that have been particularly impacted by the Government public health restrictions. Indeed some specific sectors have been temporarily closed from the outset of the pandemic, such as entertainment and arts sectors as well as many pubs”.
Under the CRSS Scheme the Government undertakes to make a payment, based on the 2019 average weekly turnover to qualifying businesses. The qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions.
The scheme comes into effect on the 13th of October 2020 and will run until 31st March 2021. The first payments will be made to affected businesses by mid-November 2020.
Payments will be calculated based on 10 % of the first €1 million in turnover and 5 % thereafter of the average VAT exclusive turnover for 2019. The payments are subject to a maximum ceiling of €5,000 weekly.
As soon as the scheme becomes operational and a certain county or region is subject to Level 3 or higher restrictions, the businesses qualifying for the scheme in week 1 and can prove that they have a valid claim, will be repaid for the entire period of the restriction within two to three working days. The payment will cease automatically at the end of the COVID restriction period. If the restrictions are extended, qualifying businesses, may submit a new claim to Revenue.
The scheme will operate on a self-assessment basis and qualification is conditioned on the ability of the business to demonstrate that the turnover has been severely impacted; that is current turnover may not exceed 20 per cent of the turnover for the corresponding period in 2019.
The CRSS scheme operates on a self-assessment basis and it is the responsibility of the applicant to retain all relevant records to show that they comply with all conditions required by the CRSS scheme.
The three-year turnaround for full R&D refund is too long for companies to wait in times when cashflows is important to sustain businesses. Recently numerous issues were encountered when claiming research and development tax credits for most start-up companies and some could go out of business before even receiving full refunds.
In order for the R&D tax credit to survive, the Government should consider introducing temporary measures to assist small companies who depend on this credit. Some of the measures should include a full refund immediately after an application has been approved rather than providing it as three separate annual instalments as it is customary.
In the last year budget there were a number of changes proposed to the R&D regime to streamline the process of credit recovery. This is more important today when cash flow is a proeminent issue for most business affected by COVID-19 restrictions. Revenue Commissioners announced plans earlier this year to expedite R&D credit repayment to free up thousands of euro in cash for businesses struggling during the COVID-19 crisis. The feedback from many start-ups is that it can take up to a year just for applications for R&D relief to be approved. The lobby support group Scale Ireland stated that urgent steps are required to better support companies.
Liz McCarthy the chief executive of Scale Ireland stated recently in an interview that “As part of the Covid response, the Government announced accelerated repayment of the credit, but reported delays in this process are creating significant challenges for our most innovative companies across the country”.
In 2018 the tax credit cost to the exchequer was €335 million as this is the last figure available.
In the present cash strapped economy damaged by COVID-19 start-ups will benefit from instant credit repayment for R&D investments. Companies are stymied by delays in enacting improvements to the R&D tax regime that include increasing the available credit from 25% to 30%, and making it available to companies who have yet to start trading.
Most of the potential claimants for R&D credits are deterred by the cost and resources employed in the application process, coupled with the lengthy review process.
In the current economic environment, prompt processing and payment of R&D tax credits is vitally important for small and medium business to increase company cashflow and secure survival. Payments to enterprises by the State should be prompt to ensure that businesses do not have to resort to expensive short-term debt.
With effect from 29 July 2019 the Registrar of Beneficial Ownership of Companies and Industrial & Provident Societies was appointed. The purpose of the Central Register of Beneficial Ownership, known also as RBO, is to improve corporate trust and transparency in Ireland and the EU by making it clear to law enforcement agencies, regulators, obliged entities, other businesses and the public about who ultimately owns and controls Irish companies and industrial and provident societies. The aim of the Directives is to deter money laundering and terrorist financing and to help sanction those who hide their ownership or control of Irish companies/societies for the purpose of facilitating illegal activities.
The central Register of Beneficial Ownership of Companies is a standalone Register established under anti-money laundering legislation and not company law. It is the duty of each company or society to identify their Beneficial Owners, keep their details on their own internal register and record these details with the RBO. This obligation is in addition to meeting their existing statutory filing obligations with the CRO under the Companies Acts in relation to directors, shareholders, etc. or in relation to other non-company legislation e.g. Industrial and Provident Societies.
The filing of beneficial ownership data must be done through the on-line portal on the RBO website www.rbo.gov.ie and is therefore a process separate to the registration of information/forms under the Companies Acts etc. Failure to comply with these requirements is a breach of statutory duties and a criminal offence with is subject to sanctions. A company/society is legally obliged under 4AMLD (Anti-Money Laundering Directives), 5AMLD and Section 5(2) of SI 110/2019 to maintain “adequate, accurate and current information in respect of its beneficial owners”.
Regulation 5(6) of SI 110/2019 states that the company/society’s internal register of beneficial owners must be available for inspection by any member of the Garda Síochána, the Revenue Commissioners, a competent authority, the Criminal Assets Bureau, or an (ODCE – Office of the Director of Corporate Enforcement) inspector appointed under section 764(1) of the Companies Act 2014.
What is a beneficial owner? A Beneficial Owner is defined in Article 3(6), 4AMLD, as any natural person(s) who ultimately owns or controls a legal entity, either through direct or indirect ownership interest in the entity, including through bearer shareholdings, or through control via other means. These will include:
- Ownership (directly or indirectly) of more than 25% of the company/society’s shares;
- Controlling (either directly or indirectly) more than 25% of the company/society’s voting rights;
- Control via other means as explained in Recital 13 of 4 AMLD as follows:
“Control through other means may, inter alia, include the criteria of control used for the purpose of preparing consolidated financial statements such as:
- Through a shareholders’ agreement,
- The exercise of dominant influence or
- The power to appoint senior management.”
If a relevant entity is a subsidiary owned by another corporate entity, any natural person(s) who holds or controls a shareholding of 25% plus one share, or an ownership interest of more than 25% in the parent corporate entity, is a beneficial owner of the subsidiary.
Article 3(6), 4AMLD refers to the circumstances where a relevant entity is a subsidiary owned by multiple corporate entities, and states that a shareholding of 25% plus one share or an ownership interest of more than 25% in a subsidiary held by multiple corporate entities which are under the control of the same natural person, shall be an indication of indirect beneficial ownership.
Ultimately, it is a natural person who must be identified and entered on the RBO as the Beneficial Owner of the relevant entity, irrespective of how many layer of ownership there are in the business’s structure.
What if after having exhausted all possible means and provided there are no grounds for suspicion, no natural person is identified as a beneficial owner, of if there is any doubt that the person identified are the beneficial owners? Then the natural person who holds the position of senior managing official shall be recorded on the RBO as the beneficial owner according to the provision contained in Regulation 5(4) SI 110/2019. It is important that the relevant entities keep comprehensive records of the actions taken to identify their beneficial owners. If in doubt, a company/society should seek legal advice to assist it in establishing who its beneficial owners are.
What are the timeframes for registering with RBO? The Register was opened and started accepting beneficial ownership filing on the 29th of July 2019. Any company/society who has not filed on or before the 22nd November 2019 will be deemed to be late and may be subject to sanctions as prescribed in the Regulations. Newly incorporated companies and I&ps must register their beneficial ownership details within five months of incorporation according to Regulation 20(2). Where the beneficial owner is a minor Regulation 25(5) of SI 110/2019 allows for the beneficial ownership details to be exempt from access by designated persons and the general public. The beneficial ownership details of minors will be automatically withheld from public access until they reach the age of 18. If you require assistance with RBO please contact us and request a quote.