Professional Services Withholding Tax - FA 2005

Amendment of Chapter 1 (Payments in Respect of Professional Services By Certain Persons) Part 18 and Schedule 13 TCA 1997

This article deals with amendments to the legislative provisions governing Professional Services Withholding Tax in the Finance Act 2005 including:

• Additions and amendments to Schedule 13 (list of accountable persons authorised to operate Professional Services Withholding Tax.)
• Amendment to the definition of Relevant Payment

Section 15 FA 2005 relates to the Professional Services Withholding Tax scheme, which provides for the deduction of income tax at the standard rate by accountable persons (Government Departments, Local Authorities, Semi-State Bodies etc.) when making payments for professional services to individuals and companies.

The current statutory list of accountable persons, set out in Schedule 13 TCA 1997, has been amended to take account of 10 bodies who are authorised to deduct Professional Services Withholding Tax from payments for professional services, with effect from 1 May 2005. These have been added to the list as follows:

144. National Treatment Purchase Fund Board

145. The Mental Health Commission

146. Crisis Pregnancy Agency

147. Commission on Electronic Voting

148. Irish Medicines Board

149. National Educational Welfare Board

150. Oifig Choimisinéir na dTeangacha Oifigiúl

151. The Health Service Executive

152. Commission for Public Service Appointments

153. Commission for Taxi Regulation

In addition to the above, three further amendments have been made to Schedule 13 as follows:

• The removal of one body:
  No 87 The Hospitals Bodies Administration Bureau
• A change of name of two others:
  No 13 The Public Appointments Service formerly The Civil Service and Local Appointments Commissioners
  No 35 Dublin Airport Authority public limited company formerly Aer Rianta cuideachta phoiblí heoranta

Finally, Section 15 FA 2005 amends the definition of “relevant payment” in Section 520(1) TCA 1997 to provide for a statutory exemption in relation to the operation of Professional Services Withholding Tax on relevant payments both between accountable persons (specifically governments departments and non-commercial state sponsored bodies which have already been granted exemption from tax) and between accountable persons and exempt charities (granted an exemption from tax for the purposes of Section 207 TCA 1997).

Enquires on this article should be addressed to taxbrief@revenue.ie