Chapter 4

Capital Gains Tax

Head 8-38. Amendment to tax treatment of certain venture fund managers

Explanatory Note:

An amendment to section 541C of the Taxes Consolidation Act 1997 similar to the amendment in section 53 of the Withdrawal Act will need to be incorporated in the Bill. Section 541C provides relief from capital gains tax for fund managers in respect of investments of a venture capital fund. The

section is amended so that investments made in the UK can be taken into account in the calculation of the amount of the relief.

Head 8-39. Relief for certain disposals of land and property

Explanatory Note:

An amendment to section 604A of the Taxes Consolidation Act 1997 similar to the amendment to that section in section 54 of the Withdrawal Act will need to be incorporated in the Bill. Section 604A gives relief from capital gains tax in respect of property purchased in any State in the EEA between 7 December, 2011 and 31 December, 2014 on a disposal of such property where that property is held for a minimum period of time. This will ensure that the current position, whereby the relief applies to the UK, will be maintained.

Chapter 5

Value-Added Tax

Head 8-40. Amendment of section 53 of Act of 2010

Explanatory Note:

This amends Section 53 of the VAT Consolidation Act 2010. This is a referential amendment consequent to the introduction of postponed accounting in Section 51.

Head 8-41. Insertion of section 53A into Act of 2010

Provide that –

The Act of 2010 is amended by the insertion of the following section after section 53:

“Postponed accounting

53A. (1) Notwithstanding section 53(3) but subject to subsection (4), an accountable person may account for the tax chargeable under section 3(b) on goods imported into the State by the person in the return to be furnished by the person, under section 76 or 77, in respect of the taxable period in which the tax has become so chargeable.

  • Where—
  • in accordance with subsection (1), goods have been imported by an accountable person without payment of the tax chargeable on the importation of the goods, and
  • the tax is not accounted for in a return furnished by the accountable person under section 76 or 77 in respect of the taxable period in which the tax has become so chargeable, the tax chargeable in respect of the importation of the goods shall become due as if this section did not
  • Where the Revenue Commissioners are satisfied that—
  • an accountable person no longer complies with one or more of the requirements specified in regulations made under section 120(7)(aa)(i), or
  • one or more conditions or restrictions, imposed by regulations made under section 120(7)(aa)(ii) as respects the accounting by an accountable person for tax by the means referred to in subsection (1), are no longer satisfied or are no longer being observed, then subsection (4)

4) Where this subsection applies, the Revenue Commissioners shall serve a notice in writing (a ‘notice of exclusion’) on the accountable person stating that the person is, from a date specified in the notice, excluded from accounting for tax by the means referred to in subsection (1) and if such a notice is served on that person then the means referred to in subsection (1) for accounting for tax shall, from the date specified in the notice, not be available to that person.

(5) Where a notice of exclusion is served on a person under subsection (4), the person may appeal the notice to the Appeal Commissioners in accordance with section 949I of the Taxes Consolidation Act 1997 , within the period of 30 days after the date of the notice”.

Explanatory Note:

This Head introduces a new Section 53A of the VAT Consolidation Act. This change introduces postponed accounting for VAT for all importers registered for VAT in Ireland. It also provides for a modification of the postponed accounting scheme which will make authorisation for the scheme subject to criteria and conditions and will enable Revenue to exclude a person from the scheme.

Head 8-42. Amendment of section 56 of Act of 2010

Explanatory Note:

This Head amends Section 56 of the VAT Consolidation Act. This concerns Section 56 VAT Authorisations, which entitles authorised taxable persons to receive qualifying goods and services at the zero rate of VAT. This amendment makes participation in the scheme subject to a number of conditions, including compliance with customs legislation and tax rules. The amendment also gives the Revenue Commissioners the power to cancel an authorisation where there are reasonable grounds to do so and to provide for a penalty for failure to adhere to conditions of the scheme.

Head 8-43. Amendment of section 58 of Act of 2010

Explanatory Note:

This Head amends Section 58 of the VAT Consolidation Act to allow for the restriction of the operation of the VAT Retail Export Scheme to allow for a minimum purchase of €175 in order to qualify for the Scheme and requires UK citizens to show proof that VAT and customs and excise duties have been paid. In addition, provision is made for the deletion of the reference to intended emigrants in the definition of ‘traveller’ in section 58(1).

Head 8-44. Amendment of section 120 of Act of 2010

Explanatory Note:

This Head amends Section 120 of the VAT Consolidation Act to provide regulation making powers with regard to postponed accounting (Section 51) and Section 56 VAT Authorisations (Section 52).

Chapter 6

Stamp Duties

Head 8-45. Amendment of section 75 of Act of 1999 (Relief for Intermediaries)

Explanatory Note:

Section 75 of the Stamp Duties Consolidation Act 1999 provides a relief from stamp duty for brokers purchasing stocks or marketable securities of Irish incorporated companies on behalf of clients.

Without this relief such transactions would be subject to a 1% stamp duty. If this section is not amended, and in the absence of any agreement on such matters, this relief would not apply for purchases made by UK based intermediaries on behalf of their clients once the UK’s post-Brexit equivalence period ends in March 2021. It is therefore proposed to extend the relief to maintain the status quo in the immediate future.

Head 8-46. Amendment of section 75A of Act of 1999 (Relief for clearing houses)

Explanatory Note:

Section 75A of the Stamp Duties Consolidation Act 1999 provides counterparty relief for share transfers. This is a stamp duty exemption for each transferee so long as that transferee transfers title to the securities concerned to another person under a matching contract. Without amendment, and in the absence of any agreement on such matters, all purchases in a chain of transactions by UK based counterparties would be subject to the 1% stamp duty once the UK’s post-Brexit equivalence period ends in March 2021. It is therefore proposed to extend the relief to maintain the status quo in the immediate future.

Head 8-47. Amendment of section 80 of Act of 1999 (Reconstructions or amalgamations of companies)

Explanatory Note:

Section 80 of the Stamp Duties Consolidation Act 1999 concerns the reconstructions or amalgamations of companies to include UK based companies where they merge with or acquire Irish based companies. In the absence of an amendment, and where there is no agreement between the EU and UK on such matters, such activities could become subject to stamp duty, with an ensuing detrimental effect on the level of trade and commerce between Ireland and the UK, on the ending of the UK’s transition period on 31 December 2020. It is therefore proposed to extend the relief to maintain the status quo in the immediate future.

Head 8-48. Amendment of section 80A of Act of 1999 (Demutualisation of assurance companies)

Explanatory Note:

Section 80A of the Stamp Duties Consolidation Act 1999 concerns the demutualisation of assurance companies to allow that instruments (shares, stock etc.) issued by acquiring companies incorporated in the UK are covered by the stamp duty exemption currently available here under such circumstances. In the absence of an amendment, and where there is no agreement between the EU and UK on such matters, shares acquired by Irish tax payers could become subject to stamp duty, on the ending of the UK’s transition period on 31 December 2020. It is therefore proposed to extend the relief to maintain the status quo in the immediate future.

Head 8-49. Amendment of section 124B of Act of 1999 (Certain premiums of life assurance)

Explanatory Note:

Section 124B of the Stamp Duties Consolidation Act 1999 concerns the charging of a stamp duty levy of 1% on certain premiums of life assurance. At present UK and Gibraltar based assurers are liable to that levy on business sold into Ireland. In the absence of an amendment, and where there is no agreement between the EU and UK on such matters, it will no longer be possible to require that such insurer’s collect and remit the levy. As no new business can be offered by such insurers after the end of the transition period, the applicability of this amendment will fade over time. It is therefore proposed to amend the scope of this section to maintain the status quo in the immediate future.

Head 8-50. Amendment of section 125 of Act of 1999 (Certain premiums of insurance)

Explanatory Note:

Section 125 of the Stamp Duties Consolidation Act 1999 concerns the charging of a 3% stamp duty levy on certain premiums of non-life insurance. At present UK and Gibraltar based assurers are liable to that levy on business sold into Ireland. In the absence of an amendment, and where there is no agreement between the EU and UK on such matters, it will no longer be possible to require that such insurer’s collect the levy. As no new business can be offered by such insurers after the transition period, the applicability of this amendment will fade over time. It is therefore proposed to amend the scope of this section to maintain the status quo in the immediate future.

Chapter 7

Capital Acquisitions Tax

Explanatory Note:

Section 60 amends section 89 of the Capital Acquisitions Tax Consolidation Act, 2003 which provides for a reduction in the inheritance tax or gift tax to be paid in respect of agricultural property. The existing arrangements are being retained to enable the relief to continue to apply to agricultural property situated in the United Kingdom and so that such property is to be taken into account in calculating the value of agricultural property owned by a farmer for the purposes of establishing entitlement to this relief.

Chapter 8

Excise

Head 8-52. Amendment of section 104 of Finance Act 2001

Explanatory Note:

This Head amends Section 104 of the Finance Act 2001 to extend the full relief from excise duty for excisable products delivered to a tax-free shop at an airport to include a tax-free shop at a port.

The section also provides that the existing full relief from excise duty which applies to excisable products that are sold in tax free shops to passengers travelling to a destination outside of the EU will not apply in the case of passengers travelling to the UK. The section also provides that the existing full relief from excise duty which applies in the case of excisable products purchased by a traveller on board an aircraft or ship during a flight or sea crossing to a place outside the EU will not apply in respect of purchases by a traveller who is going to the UK. (The commencement of the excise restriction provisions will be in response to UK policy in these areas.)

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