John Herlihy, Vice President, Google Ireland with Joe Aherne, President, CPA Ireland at the Google Ireland Headquarters in Dublin.
CPA Ireland calls for consultation prior to any proposed change
The President of the Institute of Certified Public Accountants in Ireland (CPA Ireland) has warned of the need for full and open consultation with business prior to any move by Government to change the filing and payment dates for income tax returns in 2014 and subsequent years.
Speaking at the annual CPA Ireland President’s dinner, Joe Aherne, CPA Ireland President said that because the Government has been forced to change the date of the annual budget speech from December to October in order to meet new Eurozone surveillance rules, it was an obvious consequence that the Government would also need companies to pay their income tax liabilities and make preliminary tax payments at an earlier date too.
“While there has as yet been no indication from Government that the dates for filing self-assessment returns are to be changed, common sense dictates that they will have to move. This year, the Department of Finance will be framing Budget 2014 without knowing the total amount of tax receipts for 2013. Framing a budget on ‘best guesstimates’ is no way to run a business let alone a country and cannot become the norm. For this reason we expect the Government will announce a change in the dates for filing self-assessment returns from 2014 onwards.
“As accounting practitioners we are small businesses advising and servicing other small businesses. We see at the coalface and we see on the bottom line the corrosive effects of recession. Markets have shrunk, margins have shrunk and staying in business has become harder. Many costs have stayed the same or even gone up. Due consideration and consultation must take place with small businesses and their representatives on the impact any change in self-assessment dates will have on cash strapped businesses. This is a critical issue and requires careful consideration and stakeholder consultation”, he said. “In particular we are acutely aware of the implications on cash strapped businesses should they be required to pay tax on money they have yet to earn”.
Mr Aherne continued, “the accountancy profession is more than willing to engage with government to work towards the least painful solution for business. Transition will require careful planning and the draconian penalties for late filing should be removed during a transition and education phase. The sooner we have engagement and agreement on a pathway forward, the sooner all stakeholders can begin to plan for this inevitable change”.
Commenting on the EU Commission’s decision to investigate Ireland’s tax regime for multinational companies Mr. Aherne said that the decision appeared to be influenced by comments made by Apple CEO Tim Cooke at a US Senate hearing which he subsequently retracted. “The Government has made it clear that it does not do special tax deals and is very clear on our headline corporate tax rate . Ireland’s effective corporation tax rate is higher than France and other jurisdictions. I applaud the clear and continuing commitment by this Government to the maintenance of the 12 .5 % corporate tax rate.
“While the 12.5% rate is low, it is not
a nominal tax rate. If an organisation does not have a genuine presence and substance in Ireland, it will not be in a position to avail itself of the 12.5%. If this substance is absent, the rate of tax applying is 25%, hardly a rate associated with a tax haven. We battle with the best in world to attract FDI and this tax rate is part of a strategic offering of initiatives and incentives that gives us a sustainable competitive advantage. It must be retained”.