Tax Insights From The Experts
Leading tax experts share their views with John Kinsella about clients’ tax concerns, the compliance burden, warehoused tax debt, capital taxes, tax incentives and business exit reliefs
KEVIN McLOUGHLIN Tax and Law Leader EY Ireland
‘In terms of business taxes, Ireland’s regime is pro-growth’
TAX ISSUES Domestically, business has been very focused on cost management, particularly in terms of energy costs. Internationally, business has been focused on ongoing developments in the international tax space, especially the BEPS 2.10 agenda. Some of the changes envisaged in the broad BEPS 2.0 proposals are potentially very wide ranging and businesses will need to be prepared to adjust accounting, reporting and tax compliance processes accordingly. More positively, we are seeing an increasing use of technology in compliance processes which has the potential to alleviate some of the pressure on resourcing,
PERSONAL TAX The reality is that there are not many incentives to reduce income tax burden. In terms of business, one of the more effective incentives continues to be the R&D tax credit, which allows for a tax credit for a portion of spend by companies on qualifying R&D.
TAX DEBT You can never rule anything out, especially in these extraordinary times, but I’d say tax amnesties are a thing of the past in Ireland.
POLITICS One of the reasons why Ireland has been successful in attracting and retaining investment has been the stability of its business tax regime. Stability and relative certainty on tax is very much valued by business in terms of business planning. Business and individuals would be keenly interested to understand potential changes that might be proposed by any future governments, Sinn Féin led or otherwise.
CAPITAL TAXES One of the key learnings for Ireland coming from the global financial crisis was that its tax base was not broad enough. It is very important to ensure that we have a broadly based tax system across all taxes rather than rely on single strong sources of income tax. Capital taxes are an important part of that.
In terms of business taxes, Ireland’s regime is pro-growth both for domestic and international businesses. Income taxes are relatively high and can have the effect of increasing the cost of employment, particularly when looking to attract talent from overseas. Cost of employment is a key factor for business in considering Ireland’s competitiveness internationally.
EXIT RELIEFS In my experience, most business owners are more focused on growing their businesses and tend to only think about Entrepreneur or Retirement Relief when they get close to an exit.