The Institute of Chartered Accountants in Ireland (ICAI) said today that the proposed changes to the Irish Finance Bill at Committee Stage contain some worthwhile initiatives. What is particularly encouraging is that the changes to the remittance basis and the Film Scheme represent a reversal of earlier tax policy on these issues – it is good to see flexibility being applied to reflect our changing circumstances.

“The Committee Stage amendments include new tax incentives, which seem to be aimed especially at developing a knowledge economy” according to ICAI Director of Taxation Brian Keegan. “There is a new relief which will apply a reduced tax rate on profits and gains arising from investments in high tech startup enterprises. Equally, the re-introduction of the remittance basis of taxation, in a highly targeted way, should encourage senior knowledge workers and managers to locate and work in Ireland”.

The Film Industry will welcome the extension of the Film Scheme relief – the investment threshold is to be increased to €50,000, and the effective amount of the tax reduction is also being increased. “It is unusual that good news gets included at the Committee Stage of the Finance Bill. High profile positive items like the Film Scheme would normally get attention on Budget Day itself” said Keegan.

Committee Stage is normally the opportunity to fix technical problems with tax legislation, but ICAI feels that some of the fixes do not go far enough. The changes to Revenue Investigation procedures were prompted by a need to bring practices into line with the European Convention on Human Rights. However, the Committee Stage changes do little to improve Revenue Investigation practices such as those used for the Offshore Assets Investigation which have been very successful. “More care should be taken to preserve what works. The new legislation could make taxpayers more reluctant to come forward voluntarily to Revenue to disclose errors” Keegan concluded.