Employment Wage Subsidy Scheme
On 21 December, the EWSS was reopened to certain businesses that had previously made valid claims but had already exited the scheme. This option was limited to businesses that would be significantly impacted by the public health restrictions announced on 21 December.
The main criterion for re-entry was that the business would experience at least a 30% reduction in turnover/customer orders for December 2021 and January 2022 compared with December 2019 and January 2020, due to the restrictions. Businesses established after 1 May 2019 had a different referable period for comparison purposes.
Applications to re-enter the scheme had to be submitted to Revenue on a specific template form by 15 January. The businesses also had to review their actual results on 31 January to determine whether they met the eligibility requirements and, if not, deregister for EWSS.
On 21 January, the government announced additional support for businesses directly impacted by the public health restrictions in place from 21 December to 6am on 22 January. These businesses can qualify for EWSS subsidy payments for February at the enhanced subsidy rate in place for January and can remain in the scheme until the end of May. This represents a one-month extension to the scheduled end-date of 30 April 2022.
Revenue’s Main Guidelines on the operation of the Employment Wage Subsidy Scheme provide information on the types of businesses that were directly impacted by the public health restrictions and are likely to qualify for additional support, eg bars, restaurants, theatres, and wedding reception venues whose trading hours were curtailed and/or restrictions on numbers in attendance were imposed.
The full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all employers claiming EWSS subsidies
The additional subsidy payment for qualifying businesses will be made by way of a ‘sweepback’ by Revenue. In early February Revenue provided details of how employers can make a claim, highlighted in yellow in updated guidance.
The Minister for Finance had previously signalled that the current reduced rate of Employers’ PRSI of 0.5% that applies to the EWSS will cease at the end of February. The Social Welfare Act 2021, which was enacted in December, has confirmed this change in legislation. The full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all employers claiming EWSS subsidies.
As announced previously, the EWSS has closed to new employer entrants from 1 January 2022.
Revenue has updated the EWSS guidance to reflect the announcements in December and January in Main Guidelines on the operation of the Employment Wage Subsidy Scheme; Guidelines on eligibility for the Employment Wage Subsidy Scheme from 1 July 2021; and Guidelines covering re-entry of certain employers into the Employment Wage Subsidy Scheme from 1 January 2022.
Covid Restrictions Support Scheme
The CRSS was also amended to support businesses in the hospitality and indoor entertainment sectors whose trading hours were reduced as a direct result of the public health restrictions announced on 21 December 2021.
Eligible businesses can claim a payment for the period of public health restrictions if the weekly turnover from their relevant business activity in the claim period did not exceed 40% of the average weekly turnover for a reference period. For most businesses, the reference period was 2019.
The CRSS was also amended to allow newly established businesses to participate in the scheme. A new class of business (Category B) was introduced, which allows businesses established from 13 October 2020 to 26 July 2021 to access the CRSS where the eligibility criteria are met.
The CRSS was also amended to allow newly established businesses to participate in the scheme
Given that the public health restrictions ended with effect from 22 January, businesses cannot qualify for the CRSS for any period after that date. However, businesses can avail of a ‘restart payment week’ for the week starting Monday 24 January when they resumed trading.
Revenue has updated the Guidelines on the operation of the Covid Restrictions Support Scheme to provide more details on the recent developments. Payments made under the CRSS are an advance credit of trading expenses of the business. Therefore, taxpayers will need to adjust their deductible trading expenses accordingly when preparing their income tax or corporation tax returns.
Public consultations
The Department of Finance has launched a public consultation on a possible move to a territorial tax regime for corporate entities, as outlined in the Update to Ireland’s Corporation Tax Roadmap, published in January 2021.
Currently, Irish resident corporates are taxed on both domestic and foreign source income, with double tax relief provided by allowing credit for foreign tax against Irish tax liabilities. The consultation paper considers a move to a limited territorial regime, using a participation exemption or branch exemption to exempt certain foreign income from Irish tax.
The DETE is also conducting a public consultation seeking views on the transposition of an EU Directive regarding public country-by-country reporting
This consultation is intended to be a scoping exercise to identify the benefits, costs and opportunities and risks of a move to a territorial regime. Stakeholders have until 7 March to respond.
The Department of Enterprise, Trade and Employment is also conducting a public consultation seeking views on the transposition of an EU Directive regarding public country-by-country reporting. The directive aims to enhance corporate transparency by requiring multinational enterprises (MNEs) with revenue of more than €750m to disclose publicly the income tax they pay.
On implementation, both European and non-EuropeanMNEs doing business in the EU through their subsidiaries and branches will be required to publish information on where profits are made and taxes paid across the EU and third countries. The deadline for submissions is 18 February.
Disclaimer
While every effort has been made to ensure the accuracy of this information, the Irish Tax Institute does not accept any responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of this material.
