Mandatory Electronic Filing and Payment of Tax – Clarification of companies included in Phase 2

Following a public consultation process in 2008, the Revenue Commissioners made Regulations to provide for the mandatory electronic filing and paying of certain tax returns and tax liabilities by Government Departments and Offices, State Bodies and larger companies. Full details of the provisions and the tax returns and related tax liabilities covered by the Regulations are set out in Revenue eBrief No. 42/2008. The intention of this initiative was to focus on Government Agencies and larger companies.

Revenue introduced these obligations in two phases. Government Departments, certain named Government Offices and companies whose tax affairs are dealt with by Large Cases Division came within Phase 1, with effect from 1 January 2009.

Revenue’s intention for Phase 2 was to include larger companies which are obliged to file audited accounts with the Companies Registration Office (CRO). The selection of the CRO audit exemption was largely based on the thresholds for turnover, assets and number of employees - which are the primary factors in determining a cut-off point between larger companies and other businesses. In view of difficulties encountered in identifying those companies which did not qualify for the CRO audit exemption and satisfied the larger companies criteria, Revenue determined the case base for Phase 2 on the following criteria:

• turnover greater than €7.3m; and
• number of employees greater than 50.

The focus was on company size rather than company type. Revenue has made direct contact with all companies which satisfied the turnover and employee numbers criteria included in Phase 2, which came into effect from 1 January 2010. Revenue is aware that certain types of company may be required to submit audited accounts to the CRO without meeting the turnover and employee numbers criteria. These companies will not be required to file and pay electronically under Phase 2 of the Mandatory Electronic Filing Regulations.

However, any company (including those who do not qualify for the CRO audit exemption), is, of course, welcome to commence using ROS immediately to pay and file.