Proposed extension of mandatory e–filing/payment (in three further phases – from 2011 to 2013)

Introduction

1. Increased adoption of Revenue’s on–line services is considered essential in fully realising the efficiencies – for both taxpayers and Revenue – that technology can offer. Revenue now provides a wide menu of online services: the long–established ROS system for business and self–assessment taxes, vehicle registration tax and customs entry processing; an online facility for employees to self–manage their PAYE tax affairs (called PAYE Anytime); a recently–introduced new way of paying Stamp Duty electronically without the need physically to stamp documents; as well as a range of other web–based facilities, for example, applications for tax clearance and tax relief at source for mortgage interest.
2. On–line services provide real and tangible benefits for taxpayers, their agents and for Revenue. The benefits for taxpayers/agents include greater accuracy, speed and convenience (which all translate into lower costs). For Revenue, take up of on–line services frees up increasingly scarce resources from low–value tasks, such as data entry and error correction, allowing greater focus on taxpayer support and compliance.
3. More extensive use of online filing also facilitates the simplification of paper forms and the collection of data for purposes of informing policymaking and risk profiling. By requiring certain elements of tax returns to be filed on an “online only” basis (for example, tax reliefs that may not be very widely availed of, or extracts from business accounts), paper forms can be greatly shortened and streamlined and the data capturing effort minimised.
4. Extending the use of online filing also featured in the recent report of the Commission on Taxation which recommended that where data is required to allow the appropriate evaluation and cost benefit analysis of tax expenditures, the taxpayers and businesses availing of the tax expenditures should be required to e–file their tax returns.¹

Legislation

5. Legislation² allowing the Revenue Commissioners to make regulations requiring mandatory electronic filing/payment (of specified returns and tax liabilities by defined categories of persons) has been in place since 2003. The first Regulations³ under this legislation made it mandatory for Government departments/bodies and large companies whose tax affairs are managed by Revenue’s Large Cases Division (Phase 1) and other “larger companies”, local authorities and semi-State bodies/agencies (Phase 2) to make certain returns and payments online – introduced during the course of 2009 and 2010.
6. Legislation providing for the mandatory electronic filing of Capital Acquisitions Tax returns where reliefs and exemptions other than the small gift exemption are being claimed was included in the Finance Act 2010.⁴ This will allow for very significant simplification and shortening of the paper IT38 (Capital Acquisitions Tax) return.

Proposed extension of mandatory online filing and payment from 2011 (Phase 3)

7. Revenue is proposing to extend, for returns/ payments due on or after 1 January 2011, mandatory online filing and payment of specified returns/payments – see Annex 1 – to the following additional categories of persons:
   • All companies
   • All partnerships
   • All trusts
   • Individuals who register for VAT on or after 1 January 2011
   • Individuals subject to the high earners restriction⁵
   • Individual employers with more than 5 employees

In addition, persons filing stamp duty returns will be required to do so electronically as respects instruments executed on or after 1 January 2011.

Proposed extension of mandatory online filing and payment from 2012 (Phase 4)

8. Revenue is proposing to extend, for returns/payments due on or after 1 January 2012, mandatory online filing and payment of specified returns/payments – see Annex 2 – to the following additional categories of persons:
   • All other individuals registered for VAT
   • Individuals benefiting from or acquiring foreign life policies, offshore funds or other offshore products
   • Individuals claiming one or more of the reliefs/allowances listed in Annex 2C

Proposed extension of mandatory online filing and payment from 2013 (Phase 5)

9. Revenue is proposing to extend, for returns/ payments due on or after 1 January 2013, mandatory online filing and payment of specified returns/payments – see Annex 3 – to the following additional categories of persons:
   • All individuals whose annual turnover or gross receipts exceeds €75,000 if selling goods, or €37,500 if providing services or receiving rental income
   • Persons filing CAT returns (other than those who are required to mandatory eFile under the measure contained in Finance Act 2010)
10. In tandem with these changes, it is intended that paper Forms 11/12 (Income Tax) and CG1 (Capital Gains Tax) will be greatly simplified and shortened.

Exclusion of persons with capacity difficulties in relation to online filing/payment

11. Any regulations made following this consultation will allow for exclusion of persons with genuine capacity difficulties in relation to online filing and payment, including a right of appeal against a Revenue refusal in this regard.

Views sought

12. Revenue is interested in hearing the views of practitioners, taxpayers and other interested parties on the proposals contained in this document. Submissions should be addressed, before 31 August 2010 by email to Kevin Mulkerrins, Planning Division, Revenue Commissioners (email address: kmulkerr@revenue.ie).

Revenue Commissioners,
Dublin Castle,
June 2010

Annex 1: Proposed Extension from 2011 (Phase 3)

1A-Returns (together with any related payments) to be filed/paid online by all companies, partnerships and trusts regardless of size and all individuals who register for VAT on or after 1 January 2011 – as respects filing/payment deadlines falling due on or after 1 January 2011

Corporation Tax	Form CT1
Income Tax	Form 11
PAYE Employers	Monthly P30s and Annual P35s. Forms P45 and P46 (P2Cs issued toemployers)
VAT	VAT3 Annual Return of Trading Details(RTD) VAT on eServices Return
Relevant ContractsTax	Annual RCT35 and monthly RCT30
Vehicle Registration Tax	VRT 40, Vehicle Birth Cert, VehicleRegistration form
Financial andWithholdingTaxes	F35, F30, SSIA, DWT, IUT,LAET, DIRT, EU SavingsDirective return
VIES/Intrastat	INTRASTAT VIES (Monthly, Quarterly, Annual(A1 and A2))

1B-Returns (together with any related payments) to be filed/paid online by individuals subject to the High Earners’ Restriction⁶ – as respects filing/payment deadlines falling due on or after 1 January 2011

Income Tax

Form 11 and Form RR1

1C-Returns (together with any related payments) to be filed/paid online by individual employers with more than 5 employees⁷ – as respects filing/payment deadlines falling due on or after after 1 January 2011

PAYE Employers’Returns

Monthly P30s and Annual P35s. Forms P45 and P46 (P2Cs issuedto employers)

Annex 2: Proposed Extension from 2012 (Phase 4)

2A-Returns (together with any related payments) to be filed/paid online by all other individuals registered for VAT – as respects filing/payment deadlines falling due on or after 1 January 2012

Income Tax	Form 11
VAT	VAT3 Annual Return of TradingDetails (RTD) VAT on eServices Return
PAYE Employers	Monthly P30s and Annual P35s. Forms P45 and P46 (P2Cs issuedto employers)
Relevant Contracts Tax	Annual RCT35 and monthlyRCT30
Vehicle Registration Tax	VRT 40, Vehicle Birth Cert,Vehicle Registration form
VIES/Intrastat	INTRASTAT VIES (Monthly, Quarterly,Annual (A1 and A2))

2B-Individuals benefiting from or acquiring foreign life policies, offshore funds or other offshore products – as respects filing/payment deadlines falling due on or after 1 January 2012

Income Tax

Form 11

2C – List of Income Tax or Capital Gains Tax reliefs/allowances that must be claimed online by individuals – as respects Forms 11/12⁸ or CG1 due on or after 1 January 2012

Property Based Incentives

Residential property incentives	Section in the Taxes Consolidation Act 1997
Urban renewal	Sections 372AP and 372AR
Town renewal	Sections 372AP and 372AR
Seaside resort	Section 372AU
Rural renewal	Sections 372AP and 372AR
Living over the shop	Sections 372AP and 372AR
Park and ride	Sections 372AP and 372AR
Student accommodation	Section 372AP
Countrywide refurbishment	Section 372AP

Industrial buildings incentives	Section in the Taxes Consolidation Act 1997
Urban renewal (commercial)	Sections 372C and 372D
Town renewal (commercial)	Sections 372AC and 372AD
Seaside resort (commercial)	Sections 352 and 353
Rural renewal (commercial)	Sections 372M and 372N.
Multi-storey car parks (commercial)	Section 344
Living over the shop (commercial)	Section 372D
Enterprise areas	Section 343
Park and ride	Sections 372V and 372W
Hotels	Section 268(1)(d)
Holiday cottages	Section 268(3)
Holiday hostels	Section 268(2C)(b)
Guest houses	Section 268(2C)(a)
Buildings in caravan/camping sites	Section 268(2D)
Nursing homes	Section 268(1)(g)
Housing for elderly/infirm	Section 268(3A)
Convalescent homes	Section 268(1)(i)
Qualifying hospitals	Section 268(1)(j)
Qualifying mental health centres	Section 268(1)(l)
Qualifying sports injury clinics	Section 268(1)(k)
Building used for childcare purposes	Section 843A
Specialist palliative care units	Section 268(1)(m)
Mid-Shannon corridor infrastructure	Section 372AW
Third Level Buildings	Section 843

Retirement-related reliefs (other than payroll-operated net-pay arrangements)

Retirement annuity contract payments	Section 787
PRSA contributions	Section 787C
Overseas pension plans: migrant member relief	Section 787N
Retirement relief for sportspersons	Section 480A
Relief for AVCs	Sections 774 and 776

Income exemption claims

Artists exemption	Section 195
Woodlands exemption	Sections 140 and 232
Patent income exemption	Sections141 and 234
Income on which transborder relief is claimed	Section 825A

Other income tax reliefs

Business expansion scheme relief	Section 489(3)
Seed capital scheme relief	Section 489(5)
Film relief	Section 481
Significant Buildings/gardens relief	Section 482
Interest relief: loan to acquire share in company or partnership	Sections 248, 248(as extendedby Section 250)and 253.
Share option elections: (a) 7 year deferral; (b) market value substitution	Sections128A and 128A(4A)

Capital Gains Tax reliefs or deferrals

Retirement relief (within family)	Section 599
Retirement relief (outside family)	Section 598
Disposal of site to child	Section 603A
Dissolution of farming partnership	Section 598A
Share for share relief	Sections 584, 585, 586and 587
Holding company relief	Section 626B

Annex 3: Proposed Extension from 2013 (Phase 5)

3A-Returns (together with any related payments) to be filed/paid online by non-VAT registered individuals whose annual turnover or gross receipts exceeds €75,000 if selling goods, or €37,500 if either providing services or receiving rental income – as respects filing/payment deadlines falling due on or after 1 January 2013

Income Tax	Form 11
PAYE Employers	Monthly P30s and Annual P35s. Forms P45 and P46 (P2Csissued to employers)
Relevant Contracts Tax	Annual RCT35 and monthlyRCT30
Vehicle Registration Tax	VRT 40, Vehicle Birth Cert,Vehicle Registration form
VIES/Intrastat	INTRASTAT VIES (Monthly, Quarterly,Annual (A1 and A2))

3B-Returns (together with any related payments) to be filed/paid online by persons filing CAT returns (other than persons who are already required to file electronically under provisions in Finance Act 2010)

Gift tax/Inheritance Tax

IT 38

Source: Revenue Commissioners. www.revenue.ie. Copyright Acknowledged.