In recent years, successive Pre-Budget and Pre-Finance Bill submissions by CCAB-I have argued for the streamlining of the taxation of foreign dividends, along with the extension of unilateral credits where appropriate.Last year we wrote to the Minister to point out:

• “While the pooling of tax credits and the introduction of the 12.5% tax rate in its limited application may result in the effective exemption of distributions from tax, these measures can be unwieldy in a competitive tax environment, and often fail to persuade international groups that Ireland is an attractive location for holding companies the complexity of the FA08 changes could be amended. Once dividends are sourced from profits of a company in a “relevant territory” they should be taxable at 12.5% on repatriation to Ireland. This would eliminate the necessity to establish that the dividend has been paid out of trading profits as well as all of the tracing and apportionment rules which are currently contained within the provision. The experience of CCAB-I members operating the FA08 rules is that they serve to impede the dividend flow.”

We also suggested that:

• “there is no specific relief from the deduction of withholding tax in relation to royalties and other payments in respect of patents. At present there is only relief where the two companies are in a group (as defined). If Ireland is serious about becoming a knowledge-based economy, then the position of withholding tax on royalties must echo the position in respect of interest.”

Following the changes to the Stamp Duty Levy on Insurance Policies in Finance Bill 2009, we pointed out to the Minister that:

• “A new levy on life assurance is being introduced at the rate of 1% on premiums. This new levy will apply to premiums received by an insurer on or after 1 June 2009.
  This new levy would result in discrimination within the savings sector. Investment vehicles with life assurance elements are in wide use, and compete with more traditional deposit and unitised investments. The new levy fails to distinguish between ‘pure’ life assurance policies and fixed term investments, one component of which is a life assurance benefit.”

CCAB-I discussed at length with the Department of Finance the issue of incentives to attract highly skilled talent to the country to help boost economic development. In our correspondence with the Department, we suggested changes to the limited remittance basis, among which were:

• “Under section 825B, relief only applies to individuals employed by a company which is incorporated and resident in a non-EEA State but a Treaty State. Therefore all employees of EU/EEA incorporated and resident employers or employees of non-EU/EEA & non-Treaty countries are excluded. However, considering the commercial reality of multinational operations and the expansion of the EEA region, employees are frequently transferring within the EEA area.
  The condition that the employee exercises their duties in Ireland for 3 years further restricts the relief. For many multinationals, international assignments tend to be for a period of 2 years. It may not be commercially viable and practical for employees to be on assignment for 3 years. In fact the 3-year rule could act as a disincentive – FDI companies might be unwilling to commit their brightest and best to a 3-year secondment in Ireland at the expense of their operations in other territories.”

We can also point to other items, such as the reforms to the CAT rules, as having had their genesis in discussions and submissions to government on behalf of the accountancy profession. We suggested strongly that for the Non-Domiciliary levy announced in the Budget, Irish assets which are the result of inward investment to develop trade and employment must be excluded from the €5 million test. This has been applied in the Finance Bill. This is not to say that for example that we endorse the Non-Domiciliary levy. Instead, we recognise that it is an element of Government policy.

All CCAB-I representations and submissions are matters of public record, notified to members, published on our websites and subject to the Freedom of Information rules. CCAB-I Pre-Budget submissions are considered by the Government's High Level Tax Strategy Group.

This input is not lobbying in the conventional sense, and certainly not in the pejorative sense which is now so prevalent. Rather, it is the relaying to Government of informed comment and analysis from the profession most associated and involved with the operation of the tax system in the private sector. While some of the provisions in Finance Bill 2010 are unwelcome, many reflect the fair hearing we receive from Government.

None of our submissions are possible without the involvement of the volunteer CCAB-I tax committee. Chaired by Liam Lynch of KPMG and with representatives from large practice, medium and small practice and industry, it drafts the work, and meets on the profession's behalf with the politicians, Department of Finance officers and Revenue officers to get the message across.