COVID-19 information and advice for taxpayers and agents

Compliance with certain reporting and filing obligations and the satisfaction of certain other tax-related conditions

The following guidance will assist taxpayers experiencing difficulties arising from the impacts of COVID-19 regarding compliance with certain reporting and filing obligations and the satisfaction of certain other tax-related conditions. In all cases where restrictions imposed by COVID-19 affect the applicability of Irish tax legislation on taxpayer’s tax position, records should be maintained outlining the circumstances and should be available to Revenue on request.

Benefit in Kind (BIK)

Covid-19 Testing

Due to health and safety concerns arising from COVID-19, an employer may perform COVID-19 testing on an employee at the workplace, or may engage a third party to do such testing on behalf of the employer.  In such circumstances, no benefit-in-kind charge will arise. In addition, where an employer provides a COVID-19 test kit to an employee for self-administration, no benefit-in-kind charge will arise.

Flu vaccination

An employer can arrange for their employees to get the flu vaccine by:

  • engaging a registered GP to administer the vaccination at the workplace
  • making a payment directly to a registered GP for their vaccination
  • or
  • reimbursing the employee for the cost of their vaccination (a receipt must be provided by the employee).

For 2020, due to the unprecedented circumstances, Revenue will not seek a benefit-in-kind charge regarding the flu vaccine.

The employee can claim a tax credit for the flu vaccine in their health expenses if they incur the cost themselves. 

Tax treatment of reimbursements by an employer to an employee regarding holiday/flight cancellations or in relation to costs of assisting employees returning to the State

Provided the employee is integral to the business and was required to return to deal with issues related to the COVID-19 crisis by his or her employer, the costs incurred are reasonable and the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider), a BIK will not arise. This may include costs related to family members who were on holiday or due to go on holidays with the employee. 

Employer provided equipment

A BIK will not arise where employers provide equipment such as laptops, printers, scanners and office furniture in order for employees to set up a working space in their homes.

Employer-Provided Vehicles

For the duration of the Covid-19 restrictions, where an employee is in receipt of a vehicle (car or van) provided by his or her employer, the following may apply:

(a) Employer Takes Back Possession of the Vehicle

Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period.

(b) Employer Prohibits Use

Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred, for example communication from employer, photographic evidence of odometer etc. 

(c) Employer Allows Private Use

Where an employee has a car provided by his or her employer and 

  • the circumstances in the previous example don’t apply
  • limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis
  • and
  • personal use is limited

the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due. Thus, the percentage applied in the calculation of the cash equivalent, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020, for the period of the COVID-19 restrictions. Appropriate records should be kept, for example business mileage travelled in January, amount of private use, photographic evidence of odometer etc.

Employee Continues Working

Where an employee continues to undertake business travel as usual in an employer-provided vehicle, the usual BIK rules will apply. Further information on the taxation of employer-provided vehicles is available in the Tax and Duty Manual Part 05-04-02, Benefit-in-Kind, Private use of Employer-Provided Vehicles.

Use of company cars by employees in the motor industry

Special rules for determining the cash equivalent of the car apply in the case of the calculation of the benefit in kind charge on use of company cars by employees in the motor industry. If the employee uses one car for a period of one month or greater, these special rules are not available.

During the COVID-19 crisis, employees working in the motor industry:

  • who have availed of the special cash equivalents for calculating benefit in kind on company cars from January 2020
  • and
  • who, due to current restrictions, are unable to change their vehicle within the required timeframe

may continue to utilise the cash equivalents for employees in the motor industry.

e-Working and Tax

Payment of taxi fares

Where an employer pays for a taxi to transport an employee to or from work due to health and safety concerns, BIK will not apply for the duration of the COVID-19 period only.

Small Benefit Exemption

Section 112B of the Taxes Consolidation Act 1997, allows one voucher per year up to the value of €500 to be given to an employee by his or her employer tax free, provided certain conditions are satisfied. Where an employer wishes to recognise efforts of frontline or other key staff working during the COVID-19 crisis, either by accelerating part of a reward (voucher) usually paid later in the year, or making an additional voucher award, the requirement that only one voucher issues (as per s112B(1)(d)) is concessionally waived for the 2020 tax year, where the additional award is related to an employee's exceptional efforts during the COVID-19 crisis.

This concession only applies to employees who continue to work during the restricted period. All other conditions of the section must be met, for example the maximum (cumulative) value may still not exceed €500 but, as stated above, the requirement to only issue one voucher will be waived. Appropriate documentation must be retained by an employer where this concession is availed of.

Employer Provided Accommodation

Where accommodation is made available by an employer to an employee for his or her private use a benefit-in-kind charge generally arises. Due to health and safety concerns arising from COVID-19, an employee may be provided with temporary accommodation by his or her employer to mitigate against potential transmission risks. Revenue are prepared to accept that no charge to benefit-in-kind will arise during the period of the COVID-19 crisis on employer-provided temporary accommodation in the following circumstances:

  • the accommodation made available to an employee by his or her employer is temporary in nature and the reason is to mitigate against the risk of transmission. For example, where an employee returns from an overseas trip and requires self-isolation, or where there is a concern of transmission to other frontline staff members/workers residing in the same household.

Refund of healthcare insurance premiums

Due to COVID-19 circumstances some private healthcare providers may issue a refund of healthcare insurance premiums to an employer/employee and individual policy holders who have personally paid for the policy. The tax treatment applicable in such circumstances is set out below.

Tax relief at source (TRS) is ignored for the purposes of the below, the usual procedures apply with regard to an employee claiming such relief and employers accounting for the value of the TRS amount to Revenue.  

Scenario 1: Employer paid premiums – refunds made to the employer

Where the employer receives a refund of the healthcare insurance premium the following shall apply:

  • the amount subject to BIK is reduced to reflect the new gross value of the insurance policy
  • the employer is entitled to a Schedule D Case I/II deduction in line with the reduced policy amount.

Scenario 2: Employer paid premiums – refund split between the employer and the employee

Where the refund of the healthcare insurance premium is split between the employer and the employee the following shall apply:

  • the amount subject to BIK is reduced to reflect the new gross value of the insurance policy (i.e. taking into account the refunds to both the employer and employee) and any refund made to the employee is subject to BIK
  • the employer is entitled to a Schedule D Case I/II deduction to reflect the reduced policy amount (i.e. taking into account the refunds to both the employer and employee).

Scenario 3: Payment of premium by an individual policy holder (no employer involvement)

Where the refund of the healthcare insurance premium is made to an individual policy holder the refund is not subject to tax.

Real-time foreign tax credit (FTC) for Restricted Stock Unit (RSU) cases

In respect of 2019 cases for whom real-time foreign tax credits were provided through the payroll, the 31 March 2020 filling deadline will be suspended. In such circumstances, the 2019 income tax return for such employees will revert to the standard income tax filing date (31 October 2020) for that return or any extended filing deadline for that return as appropriate. The employer notification to Revenue in relation to such cases should be made as soon as possible but no later than the extended income tax filing date where applicable.

Share schemes filing obligations 

The filing deadline for all 2019 share scheme returns is being extended from 31 March 2020 to 30 June 2020. 

Revenue has agreed to further extend the filing deadline for the 2019 ESS1 - Return of Information by the Trustee of an Approved Profit Sharing Scheme to 31 October 2020.

Special Assignee Relief Programme (SARP)

The 90-day employer filing obligation, which is a requirement for an employee to be eligible to benefit from SARP relief, is extended for a further 60 days. It is anticipated that such an extension should provide sufficient time for employers to file the required return, but exceptional cases may be submitted to Revenue for consideration on a case by case basis.

Trans-Border Workers Relief

If employees are required to work from home in the State due to COVID-19, such days spent working at home in the State will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met.

PAYE Dispensation Applications

Given the unprecedented circumstances and the restrictions on travel as a consequence of COVID-19, Revenue will not strictly enforce the 30-day notification requirement for PAYE dispensations applicable to short term business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 workdays in the State in a tax year.

Foreign Employments - Operation of PAYE

Revenue will not seek to enforce Irish payroll obligations for foreign employers in genuine cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocates temporarily to the State during the COVID-19 period and performs duties for his or her foreign employer while in the State.

Multi-State workers

A foreign employer may continue to operate Irish payroll on the basis of a non-resident employee’s established work pattern pre-COVID-19 where:

  • the non-resident employee had been carrying out duties of a foreign employment partially in the State and partially in the foreign jurisdiction prior to COVID-19
  • the foreign employer had applied payroll taxes in the State and the foreign jurisdiction based on the established work pattern prior to COVID-19
  • the employee cannot return to the foreign jurisdiction as a result of the travel restrictions imposed by COVID-19
  • and
  • the employee continues to carry out their duties of employment in the State.

The employee and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in the State for production to Revenue if evidence is requested that such presence resulted from COVID-19 related travel restrictions.

PAYE Exclusion Order - Irish Contract of Employment

Regarding employees who are working abroad for a foreign employer under an Irish contract of employment where a PAYE exclusion order is in place, the position will not be adversely impacted where the employee works more than 30 days in the State due to COVID-19.

Residence rules - Force Majeure circumstances

Existing guidance states that where an individual is prevented from leaving the State on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action – none of which could reasonably have been foreseen and avoided – the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances. Where a departure from the State is prevented due to COVID-19, Revenue will consider this ‘force majeure’ for the purpose of establishing an individual's tax residence position.

Corporation Tax and presence in the State or outside the State resulting from COVID-related travel restrictions

Where an individual is present in the State and that presence is shown to result from travel restrictions related to COVID–19, Revenue will be prepared to disregard such presence in the State for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.

In addition, and where relevant, if an individual is present in another jurisdiction as a result of COVID-related travel restrictions, and would otherwise have been present in the State, Revenue will be prepared to disregard such presence outside the State for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.

The individual and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in the State, or outside the State, for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.

Research and Development  (R&D) Tax Credits

For information on early payment of 2020 instalments of excess R&D Tax Credits please see Revenue services, refunds and repayments of tax.

Exemption in respect of retraining costs as part of a redundancy package

Where an employer pays the cost of retraining an employee as part of a redundancy package, the cost of retraining up to a maximum of €5,000 is exempt from income tax by virtue of section 201 TCA 1997, provided a number of conditions are satisfied.

One such condition is that the retraining is completed within 6 months of the termination of employment. Having regard to Covid-19 restrictions, it may not be possible to satisfy this condition.

Therefore, where a termination takes place during the Covid-19 crisis, Revenue is willing to extend this exemption once the retraining takes place within 6 months of the required course/training becoming available following the end of the Covid-19 crisis.

Childcare services relief

Childcare services relief is an income tax exemption that is available to individuals who provide childminding services in their own homes. In order to qualify for the relief you must –

  • not receive more than €15,000 income per annum from the childminding activity
  • provide the service in your own home
  • not mind more than three children, who are under the age of 18 years, at any one time
  • be self-employed and registered for Income Tax self-assessment.

The HSE has issued guidance on the protection of children from the coronavirus, including guidance on the provision of childcare.  Where, in accordance with this official guidance, an individual minds children in their own home (rather than in the individual’s home), the individual may still qualify for childcare services relief. 

For further information, please refer to Tax and Duty Manual Part 07-01-29. 

Close Company Surcharges

 Guidance on temporary measures in relation to Close Company Surcharges.

Scholarship Exemption

Guidance on temporary measures in relation to the scholarship exemption. 

Exchange of Information

Extension and deferral of certain time limits for the filing, reporting and exchange of information for DAC2/CRS, FATCA and DAC6

Following the adoption of Council Directive (EU) 2020/876 which allows for the deferral of the exchange dates for DAC2, and the filing and exchange dates for DAC6, as a result of the impact of the COVID-19 pandemic, Revenue can confirm that the deadline for the filing of DAC2 returns in respect of the 2019 reporting period is now deferred until 30 September 2020.

The new deadline of 30 September will also apply for the filing of CRS and FATCA returns in line with what has already been agreed by the  Global Forum on Transparency and Exchange of Information for Tax Purposes and by the United States.

The EU mandatory disclosure regime introduced by Council Directive (EU) 2018/822 (the 'DAC6') comes into operation on 1 July 2020. 

The revised reporting deadlines are now as follows
Time framework for reportingNew reporting deadline

Mainstream reporting

The 30-day time period for the reporting of information related to  

new reportable cross-border arrangements will now commence on 1   January 2021.

 

For any reportable cross-border arrangements made between 1 July   2020 and 31st December 2020, the 30-day reporting period also   commences on 1 January 2021.

The 30-day period for   reporting commences on 1 January 2021

 

Lookback reporting   period

Reportable cross-border arrangements, the first step of which was   implemented between 25 June 2018 and 30 June 2020.

28 February 2021

Periodic reporting on   marketable arrangements

30 April 2021

The Revenue Commissioners, DAC6 filing portal will open on 1 January 2021.

Section 482 Buildings and gardens re-opening

Section 482 of the Taxes Consolidation Act 1997 provides relief for expenditure on significant buildings and gardens that are of significant scientific, historical, architectural or aesthetic interest.  One of the conditions for the relief is that reasonable access to the whole or a substantial part of the building must be afforded to the public for a period of not less than 60 days in any year.

Properties will begin to reopen under Phase 3 and 4 of the Government’s roadmap for reopening society and business. It is recognised that in some cases, because of health and safety concerns relating to the Covid-19 pandemic, properties may not be in a position to reopen to the public this year. In these circumstances Revenue will not revoke any determinations up to 31 December 2020 where the public access requirement cannot be achieved in 2020.

Capital Acquisitions Tax Business Relief

Business Relief allows a reduction of 90% in the taxable value of certain business assets that comprise a business for the purposes of calculating gift and inheritance tax. To avoid a clawback of the relief, a gifted or inherited business must continue to trade for the period of 6 years after the valuation date for the gift or inheritance.  The relief will not be clawed back where, because of Covid-19 restrictions, a business ceases to trade temporarily during this 6-year period.  

The normal practice of not imposing a clawback where a business ceases to trade because of bankruptcy or bona fide winding up on grounds of insolvency will continue to apply. 

Next: VAT and Customs information, including reliefs for COVID-19 specific products