47/49, Pearse Street, Dublin 2

1 Introduction

CCAB-I believes that it is generally positive to review taxation regimes from time to time to help ensure legislation is kept up to date.

In this instance, the current consultation was signalled by Minister Noonan at the Committee Stage debate of Finance Bill 2014 which took place in November 2014. Given this lead-in time, we hope that the relatively short period actually offered for consultation from 24 July 2015 does not have a negative impact on the final outcomes from the consultation.

2 General Observations

• We concur with the observation in the Consultation Document that important interpretations exist which assist with the application of TCA97 s114. These should not lightly be discarded in the event of any legislative change. In considering the areas for comment as noted here of the Consultation Document, it seems to us that at least some of these may pertain to individual instances of dispute between the taxpayer and the Office of the Revenue Commissioners. It is possible that a better resolution of these particular instances might be achieved through the normal Tax Appeals process rather than by proposals to change the law.
• This particular consultation has implications not just for taxpayers and private sector employers, but for the State as an employer. There have traditionally been close links between the expense reimbursement practices within the Civil Service and the tax compliance expectations for employers in the private sector. Accordingly there may be implications for human resources and other contractual obligations relating to employments generally, which we are not best positioned to comment on because they are not solely tax issues. Any proposals to change the law governing the tax status of reimbursed expenses should only be made after examining these issues.

3 Treatment of the expenses of Non-Executive Directors

• We understand that the current review was prompted in part by the highlighting of the tax treatment of travel expenses of non-executive directors in commercial bodies.
• TCA97 s195A exempts from tax the reimbursement of expenses of travel and subsistence to certain members of non-commercial bodies, in both the public and private sector, in respect of attendance at meetings of such bodies. The exemption applies where the work of the members is generally carried out at such meetings.
• In order to provide greater certainty in the tax treatment of travel and subsistence expenses of non-resident directors, and to ensure consistency of treatment, this provision should be extended to cover payments to non-resident directors of commercial bodies.

4 Conclusion

While mindful of the consultation deadline of 21 August 2015, as already noted we feel that there are broader issues arising from this review. For the moment we have focussed on the issue of travel expenses for non-executive directors because this seems to us to be the most straightforward issue to correct by a change in the legislation.

We hope to correspond further on these matters. Equally we will be happy to engage in any further consultations and discussions you may wish to conduct in relation to this important area of tax legislation.

5 About CCAB-I

The Consultative Committee of Accountancy Bodies – Ireland is the representative committee for the main accountancy bodies in Ireland. It comprises Chartered Accountants Ireland, the Association of Chartered Certified Accountants, the Institute of Certified Public Accountants in Ireland, and the Chartered Institute of Management Accountants.

Brian Keegan, Director of Taxation at Chartered Accountants Ireland (brian.keegan@charteredaccountants.ie, 01-6377347) may be contacted if any further details in relation to any points made in this submission are required.

Source: Chartered Accountants Ireland. www.charteredaccountants.ie.