Services to Irish-based Companies

Important Tax Tips March 2020

ROS Extended Pay and File – Deadline 2020

Revenue has confirmed that the extended ROS pay and file deadline for 2019 Form 11 Income Tax returns and taxpayers liable to Capital Acquisitions Tax is Thursday 12th November 2020.  This extended deadline applies only if the relevant returns and the appropriate tax payments are submitted via ROS.  Otherwise the required date to submit both returns and payments is no later than 31st October 2020.

According to Revenue e Brief No: 009/20

For customers who file the 2019 Form 11 Return and make the appropriate payment through ROS for:

  • Preliminary Tax for 2020
  • Income Tax balance due for 2019

the due date is extended to Thursday 12th November 2020.

For beneficiaries who receive gifts or inheritances with valuation dates in the year ended 31st August 2020 and who make CAT Return and the appropriate payment through ROS, the due date is also extended to Thursday 12th November 2020.

To qualify for the extension, customers must both pay and file through ROS.  Where only one of these actions is completed through ROS, the extension does not apply and the required date to submit both returns and payments is no later than 31st October 2020.

PAYE and Directors

Treatment of Income

Payments to director of Irish incorporated companies are subject to the Schedule E charge to Irish Income Tax and to deductions at source under the PAYE system.  More information is contained in Revenue Tax and Duty Part 42.04.61.  The legislation (section 112 Taxes Consolidation Act 1997) provides two treatments for directors depending if the individual is a proprietary director (holds at least 15% of the company’s shares) or a non-proprietary director.

Income (i.e. Director’s fees) received by a proprietary director is taxed when the income is earned i.e. at the time it is put through the accounts and not when received.  Proprietary directors also must file an income tax return and include details of the director’s fees earned.

Income received by a non-proprietary director is taxed when it is received.

The PAYE system applies to both proprietary and non-proprietary directors as it does to any other employee.

In general, under Section 966 TCA 1997, for proprietary directors, emoluments paid more than six months after the end of the accounting year in which they were declared are deemed paid on the last day of the accounting year.  In these instances, under the PAYE real time system, the company must make an amendment to the payroll submission for that period and resubmit to Revenue.

General Treatment

Since 1st January 2018, income from an office/employment is chargeable to tax on a receipts basis.  This means that the income is subject to tax, USC and PRSI when it is received, regardless of when it was earned.  Income received by a proprietary director is still taxed on an earnings basis.  Employers must, however, operate PAYE on the director’s salary at the time of payment and report this payment to Revenue on or before the date it is paid.  More information on employers’ PAYE obligations can be found in Revenue’s Tax and Duty Manual Part 42.04.35s.

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