Electronic Vat Refunds:
Recent EU legislation introduced on new electronic VAT refund procedure across the EU for all claims submitted by traders within the EU. Previously, where VAT had been incurred by Irish established traders outside the State but within the EU, it was necessary to mke a paper claim to that member State in order to recover the VAT under the 8th directive. Paper applications are no longer accepted.
Under the new rules, where a business is established in Ireland, the business is required to submit an electronic application (via ROS) to Revenue for the VAT incurred in another EU State. Revenue will then forward the claim electronically to the relevant Member State for processing. Certificats of Taxable Status are no longer required. It is anticipated that this legislation will simplify and expedite the recover process.
A Good Time for Start-Ups:
Tax relief for Start-up Companies was first introduced in 2009 and the Minister confirmed in his budget speech that this relief will be extended to qualifying trades started in 2011. New companies, which commence trading in 2011, are given an exemption from Corporation Tax and Capital Gains Tax in each of the first three years to the extent that the tax liability in the year does not exceed €40,000.
The scheme is being modified so that the value of the relief will be linked to the amount of employer's PRSI paid by the company in an accounting period, subject to a maximum of €5,000 per employee. If the amount of a qualifyting employer's PRSi is lower than the reduction in Corporation Tax liability, relief will be based on the lower amount.
Penalty for Bankruptcy Slashed:
Under plans unveiled in the Civil Law (Miscellaneous Provisions) Bill, business people who are declared bankrupt will be back in business after just 6 years. The provision, outlined in the Bill, will halve the length of time that a person remains in bankruptcy. This is the first step in the overhaul of the Personal Insolvency Law, with further changes being proposed when the Law Reform Commission presents its final report.
Corporate Code of Conduct:
Under new guidelines issued by the Central Bank of Ireland and the Financial Regulator, financial institutions could face fines of up to €5 million for breaching a new Corporate Governance Code. The Corporate Governance Code came into effect from 1 January 2011 and applies to Irish banks, buidling societies and most insurance companies and reinsurance companies. Financial institutions have until 30 June 2011 to implement the extensive changes required by the code, but they have until 31 December 2011 to deal with any changes required to board composition.
The Corporate Governance Code incorporates severe and wide-ranging penalties for companies who do not comply. Corporate bodies could face fines of up to €5 million and individuals responsible within a firm could face fines of up to €500,000. Part of the new code requires board members to meet at least quarterly, and board members of major institutions must meet in at least eleven calendar months of any year. This rule applies to non-executive directors also. The code also requires Financial institutions to implement a considerable amount of documentation including a well-defined organisation structure, formal letter of appointment for directors, and an annual formal review of the board and board members.
Access Denied to Debt Judgments:
The Courts Service of Ireland has banned public access to most debt judgments after an internal review found there was no legal basis for making the information available. The decision will deprive business people of important information about the financial history of anyone they are dealing with, such as whether a debt has ever been registered against the person.
Traditionally, information about debt judgments was availalbe to the public through inspection of 'cause books' within circuit and district courts. This information was collected by a non-profit company, Irish Judgements, and sold to commercial publications such as Stubbs Gazette. Credit Unions and other lenders, as well as government departments, relied on this information in their business dealings. The Courts Service said the decision was taken following a review which found that there was no provision in legislation or in court rules for a general right of access to cause books. There is still public access as required by law to the Register of Judgments in the High Court offices. This allows access to register judgments to personal callers to the office in the Fourt Courts, for an €11 fee.
Big Fines for Bad Bribes:
The OECD Bribery Convention was ratified by the UK in 1998, however, it will not take legal effect in the UK until April 2011. This Act will apply to all Irish Companies and Partnerships operating a business or 'part of a business' in the UK. It is therefore imperative that businesses with a presence in the UK become familiar with this new legislation. The main offences under the Act are as follows:
1. The general offences of paying or receiving a bribe.
2. The bribery of foreighn officials.
3. The failure of commercial organisations to prevent bribery.
Where it can be proven that a person 'associated' with a company bribes another to gain business or advantage for the company then that company can be held liable. The only defence for a company in this position is to show that the company had adequate procedures in place to prevent bribery. Guidelines on an 'anti-corruption' policy will be published by the UK government in April 2011.
Under the terms of the new Act, an individual or company may be prosecuted regardless of where the act or omission which constituted the offence took place. The Act will increase the maximum jail term for bribery by an individual from 7 years to 10 years A company convicted of failing to prevent bribery could receive an unlimited fine.