SARAH MEREDITH ‘International and financial services tax are growth areas’

Partner-International Tax Grant Thornton

ACTIVITY International tax and financial services tax are areas that have grown rapidly in the firm in recent years, reflecting the importance of these sectors in the Irish economy. There have been a number of notable changes to the tax system, with issues such as transfer pricing, interest limitation rules, anti-hybrid analysis amongst other matters requiring consideration from a tax perspective. With Pillar II changes on the horizon, many clients will require assistance as they navigate these new rules.

The complexities inherent in the indirect tax system have led to an increased demand for these services too. Whilst M&A activity has stabilised in the past 18 months, the need for high-quality tax due diligence and transaction advice is as vital as ever, with the structuring being more complex in light of rule changes.

TAX POLICY Government should prioritise maintaining Ireland’s position as a strategic European base for FDI based on our pro-business, low corporation tax environment with access to a skilled workforce. Certainty in relation to both corporation tax rates and the regime, along with a review of the income tax system, are essential in maintaining success from an FDI perspective. Indigenous businesses account for almost 60% of turnover generated in the economy. In the aftermath of Covid-19, it is vital that this sector is supported in terms of survival and growth.

WAREHOUSED TAX DEBT Our experience is that Revenue are generally accommodating vis-à-vis businesses putting phased payment arrangements in place and are willing to accept modest upfront payments (historically they would have insisted on as much as 25% upfront in many cases). Also, they are prepared to relax somewhat the level of documentation normally required when putting such an arrangement in place.

TAX INCENTIVES At this point in the year, an effective tax strategy for owner-managers and professionals is to maximise their personal pension fund contributions. To the extent contributions are processed by the online tax filing date of 15 November, they can be included in the tax calculation for 2022. In terms of any future changes, we would welcome improvements to the entrepreneur relief to encourage both entrepreneurship and investment in Irish business.