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Ireland Legal News
A number of new legal developments are impacting the world of tax in Ireland. Taxand Ireland seeks to provide clarity to these latest developments.
Jobs Initiative Announced To Stimulate Employment Growth
On 10 May 2011, the Minister for Finance, Michael Noonan announced the Government's Jobs Initiative which contains measures to promote employment within certain sectors of the domestic economy. The Minister also took the opportunity to reiterate in his speech, the Government's commitment to the 12.5% corporation tax rate and that it is integral to Ireland's long term tax strategy. Below are the key tax highlights announced in the Jobs Initiative which has been put into effect in the Finance (No.2) Bill 2011.
- Enhancement of the Research and Development tax credit regime by allowing companies the option to account for the credit above or below the line. The Finance (No.2) Bill also amended the amount of R&D tax credits which can be refunded to a company to two years' payroll liabilities instead of one year
- The tourism sector also received a boost and a stimulus for employment with a reduction of the 13.5% VAT rate to 9% in respect of services relating to tourism. The new rate will take effect from 1 July 2011 until 31 December 2013. The Air Travel Tax is also to be reduced to 0% subject to a Ministerial Order and commitment by the Airlines on reaching certain increased passenger numbers
High Court Rules on Deadlines
In a recent High Court case it was held that the usual statutory time limit for raising assessments applied to the Taxes Consolidation Act (general anti-avoidance section). In that case Revenue had originally allowed tax relief to the taxpayer but 9 years later decided that the transaction was a tax-avoidance measure and sought a repayment of taxes.
The above case related to a period when tax law did not explicitly include a time limit for Revenue to raise an assessment under Section 811. It is important to note that the Finance Act 2008 introduced legislation to allow Revenue to raise assessments under Section 811 without a time limit from 14 February 2008 where no protective notification was made by the taxpayer in their tax return.
It is important that multinationals understand the full extent of these tax developments and seek the necessary advice from a tax advisor to remove any ambiguity or confusion.
Your Taxand contact for further queries is:
T. +353 1 639 5213