‘We have had to invest more in specialised tax areas’ DEREK HENRY
ACTIVITY In recent years, several aspects of businessrelated tax have become much more detailed and challenging, primarily as we have had to keep up with international tax reform. For BDO this has meant that we have had to invest more in the following specialised areas to ensure our clients’ needs are met. International Tax: This has become increasingly complex due to changes in global tax. Planning for the introduction of Pillar 2 is a key challenge we are assisting multinational businesses with.
Transfer Pricing: Businesses have increased documentation requirements and Revenue scrutiny as Ireland has had to adopt more stringent transfer pricing regulations to meet global standard. Technology: The use of data analytics in tax compliance and planning has become more prominent in order to be more efficient, and provide clients with more accurate and timely insights.
Other areas: R&D tax credits, employment tax services, and financial services are other areas of specialisms that we have invested in. These are complex areas that require deep specialised experience to be able to service clients’ needs professionally.
TAX POLICY FDI growth in Ireland has been extremely significant in building our economy and fuelling job creation and revenue. However, it is important to support productivity and innovation in the indigenous sector for job creation, reducing over-reliance on FDI, and to continue to support export-led businesses.
Of more fundamental importance is the experience and mindset it creates in the business community in Ireland. To be a successful entrepreneur requires a combination of skill, mindset, attitude, hard work, dedication and courage. We should encourage and laud those folk who pursue entrepreneurship.
TAX INCENTIVES The first thing I would say is that we have a system where self-employed people could pay 3% more tax than a PAYE earner on the same income level. This needs to be addressed and unfortunately was not in Budget 2024. There are a number of tax incentives for owner-mangers and professional clients available to help reduce income tax burden, but unfortunately they are limited.
From an income tax perspective, pension planning, the EII scheme and StartUp Relief for Entrepreneurs offer some levels of relief.
On the capital gains tax side, entrepreneur relief and retirement relief can significantly reduce the capital gains tax on the proceeds from the sale of their business.