Finance Bill 2010 analysis and comments
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Transfer Pricing
"Multinationals will ask 'what does this mean for us?'. They'll want to know if Irish Revenue will use these rules to raise Tax. Many multinationals already have documentation in place to support Inter-company pricing arrangements; however, companies must now review all existing arrangements to assess compliance with the proposed rules and decide on the need for remedial action if any"
Dan McSwiney, Transfer Pricing Director
Sharia announcement
"An Ernst & Young report issued last week at the World Economic Summit confirmed that Ireland has third most globalised economy in the world. Ireland has benefited tremendously from globalisation with over 80% of our goods and services exported internationally. Permitting and then encouraging different, non-anglo-saxon or non-Western, forms of financing and investing is a most welcome announcement from the Department and will help further enhance our international attractiveness."
Aidan Walsh, Corporate Tax Partner
Corporate Tax
"The extension of the 12.5% rate of corporation tax to dividends received by publicly quoted groups from companies located in non-treaty countries further enhances Ireland as a location for holding companies". "The elimination of corporation tax on certain portfolio dividends, while welcome, is not unexpected given the European case law in this area."
"The move to a self-assessment basis for operating Dividend Withholding Tax removes a significant administration burden for non-resident investors in Irish companies."
"The new withholding tax exemption for companies paying patent royalties to certain non-residents is a step in the right direction. However, companies will need to consider the conditions for the relief very carefully." "The improvements to the capital allowance regime for intangible assets and the extension of unilateral credit relief for royalty income will further enhance Ireland as a location for developing, owning and exploiting intellectual property."
Kevin McLoughlin, Head of Tax Services
Asset Management
"The Finance Bill published today contains very positive news for the Irish asset management and investment funds industry. The proposed changes will enhance Ireland's attractiveness as a location for regulated funds and demonstrates that Ireland is an ideal location for EU regulated management companies and funds."
Donal O'Sullivan, Corporate Tax Partner
Income Tax - Remittance Basis
"The favourable remittance basis of taxation available to senior executives assigned from the US into Ireland, under which they only pay income tax on a portion of their employment income arising in Ireland or remitted into Ireland, has now been extended beyond the US to also cover assignments from EU and EEA. This is for assignments commencing on of after 1st January 2010. In addition, the period of time for which they must remain on assignment into Ireland has been reduced from 3 years to 1 year."
Jim Ryan, Tax Partner
Income Tax - Domicile Levy
"The budget announcement stated that a new 'Domicile Levy' would be introduced for Irish citizens who are resident abroad. The Bill has confirmed that to the extent such individuals have an Irish income tax liability; that liability will reduce their €200k domicile levy."
Jim Ryan, Tax Partner
Indirect Tax
"Consumers are faced with the prospect of paying extra for services such as waste collection, recycling services or off street parking received from local authorities from 1 July 2009. This is as a result of infringement proceedings taken against Ireland by the European Commission on the basis that such services should be subject to VAT where the Public Body is in competition with private operators"
Jarlath O’Keefe, Indirect Tax Partner
