Charitable Status can be applied to the Revenue Commissioners on projects which are set up for charitable, scholastic or religious purposes. It should also be noted that Guarantee Companies are required under statutory legislation to file Audited Accounts every year with the Companies Registration Office.

A Private Limited Company normally consists of 1-4 shareholders but can have more, up to a maximum of ninety-nine. When a private limited company has only a single shareholder, this is known as a Single Member Company. This single or sole member may if he or she so decides may dispense with the holding of general meetings, including Annual General Meetings.

Introduction
Value Added Tax (VAT) is a minefield for many people when starting a new business and it’s something we are asked about by our clients on a regular basis.  Most ask us how they can avoid it!  The purpose of this article is to give a brief overview of VAT, and to explain why it actually may be a good idea for businesses to voluntarily register for VAT. 

What is VAT?
VAT is what’s called an “indirect” tax, in that it’s not levied directly by Revenue.  It’s up to businesses to charge, collect and pass the tax on to Revenue.  This is quite clever since it means we’re all really unpaid tax collectors for the government! 
Generally it’s the final consumer of the product or service who suffers the VAT, and can’t claim a VAT refund from Revenue.  Businesses that are VAT registered can usually claim a VAT credit for VAT they have suffered from other VAT registered businesses (or individuals who are sole traders).  
When the VAT return (Form VAT3) is processed by Revenue, the result is simple; if the VAT on your purchases is greater than the VAT on your sales you are due a refund.  Otherwise you need to pay Revenue the difference.

Why should I voluntarily register for VAT?
There are a few reasons in my opinion but the first simple answer is so that you can claim a credit for the VAT suffered on your purchases.  Bear in mind however that the purchases must be “wholly and exclusively incurred in the furtherance of trade” – meaning the item purchased must be a valid business expense.
Every business owner knows cash is king right now, so being able to get a refund from Revenue is a potential boost to any operation. 
Secondly, in my opinion it adds a level of professionalism to show your clients and suppliers that you are VAT registered.  If you offer professional services of any kind I would personally suggest you register for VAT, even if you are under the thresholds.
One final point I should make is that VAT is a high risk tax.  Revenue penalties for VAT fraud or evasion are extremely punitive.  For example from December ’08 the fixed penalty for failing to register for VAT is €4,000.  You must also keep proper books and accounts, otherwise additional penalties may apply.

What are the VAT thresholds?
Currently in Ireland you are required to register for VAT if you provide, or believe you will generate turnover from the provision of services to the value of €37,500 in any continuous period of twelve months.  This increases to €75,000 for the sale of products.

Which basis do I register for?
If at least 90% of your turnover is from providing goods or services to unregistered persons or your annual turnover is not likely to exceed €1,000,000 then you may choose to register for the “cash receipts” basis of accounting for VAT.  This would be the preferred basis for start-up businesses in our experience because it means you are only liable for VAT on sales when you actually receive the payment.
The alternative is the “invoice accounting” basis.  This could be a drain on cash flow for a start-up since you would be liable to pay the VAT when the invoice is issued, yet the client may not pay you for several months.
What VAT rate should I charge?
Briefly, there are four main tax rates in Ireland. 
• Exempt – examples include certain financial, medical and educational providers.  They don’t charge VAT on their sales and are not entitled to claim VAT on their purchases.
• Zero – the main example is providers of food and drink.  They actually charge a 0% VAT rate and are entitled to claim VAT on their purchases.
• 13.5% - two examples are building services and photography.  They charge a reduced VAT rate and can claim VAT on their purchases.
• 21% - simply put, this rate is applied generally to all goods and services that don’t fit into any of the above categories.
There’s no straightforward answer to which rate you should charge I’m afraid as it really depends on what products or services you are selling.  Most of us will fall into the 21% category though it is possible to have a mix of rates, depending on what and how you supply the goods or services.
 
What about VAT returns?
In a nutshell if you’re VAT registered you generally need to submit your Form VAT3 return by the 19th day of the month following the end of the VAT period, which are typically two calendar months each.  So, for the VAT period 1 – beginning of January to the end of February  - your return must be received by Revenue by the 19th of March if posting it, or by the 23rd of March if filed online using the Revenue Online Service (ROS).
You may be allowed to file a monthly VAT return if you are in a permanent refund position, which of course could be very helpful for cash-flow.  Conversely, you may also file an annual return if you have a low VAT liability.  Traders who opt to pay by Direct Debit may also avail of this facility.

How do I register for VAT?
VAT registration is done using the following forms
• Form TR1 is used to register an individual, partnership, trust or unincorporated body
• Form TR2 is used for registration if trading as a company.
 We would always recommend you seek expert advice when registering for VAT as  mistakes may be costly. 
A good tax adviser will be able to analyse and understand how your business works and should advise you the time to register, the basis and rates to charge most appropriate to your business. 

Richard Fitzgerald QFA TMITI is Tax & Financial Adviser with The Wealth Shop. To contact Richard or a member of his team, please call 1850 88 24 24 or see www.thewealthshop.com

Disclaimer: The above content is provided by a 3rd party. Company Bureau is not responsible and shall not be liable for any expense incurred as a result of any misrepresentations contained in the above information. You should therefore verify any information obtained in the above and seek paid professional advice before you act upon it. This page contains a link to an internet site maintained by a third party. Company Bureau accepts no responsibility for the privacy practices or content of other such sites. You assume sole responsibility for use of third party links.

Introduction

Section 486C of the Taxes Consolidation Act has been introduced to promote and encourage new business activity in the traded sector of the Irish economy.  Essentially the relief provides for an exemption from corporation tax currently at 12.5% (up to certain levels) for the first three years of operation. 

3 Year Exemption – Eligible Companies

This is a new relief which you can claim if:

• You are a new company (incorporated in Ireland or another EEA State) since 14th October 2008
• Which commences a qualifying trade in 2009 or 2010
• Whose corporation tax liabilities do not exceed certain levels

You must commence a qualifying trade.  A qualifying trade does not include:

a) A trade previously carried on by another person.  The trade must be a new business and not the transfer of an existing business or part of a business from a sole trader or previous company
b) An excepted trade (subject to 25% tax).  Profits from non trading activities such as rental and investment income are taxed at 25% and do not qualify for the relief
c) A trade carried on entirely outside Ireland and whose profits are subsequently taxed at 25%.  An Irish incorporated company must be managed and controlled in Ireland and have “substance” in Ireland in order to qualify for the 12.5% corporation tax rate and in turn the exemption as outlined in this article
d) A trade dealing in or developing land or exploration and extraction of natural resources
e) A trade of a “service company” that would be subject to a professional companies profits surcharge as per S441 TCA.  Effectively, the “service companies” that do not qualify for this tax relief include close companies (5 or fewer shareholders/ directors) whose businesses consist of the carrying on of a profession or the provision of professional services, or of exercising an office or employment.  These “service companies” also include businesses that provide services to professionals
f) A trade in the fishery or aquaculture sectors
g) A trade active in the primary production of agricultural products
h) A trade active in the coal sector 

Calculation of start up company relief

Full relief is available to a new company in any of it’s first three years of operation where it’s total corporation tax liability for a 12 month accounting period does not exceed €40,000.  A qualifying new company with a corporation tax liability up to this amount will have it’s corporation tax liability reduced to nil.

In effect this means that a company can have a taxable profit of €320,000 per annum (320K x 12.5% = 40K) reduced to zero.

If the corporation tax charge is between €40,000 and €60,000 then marginal relief will apply.

Revenue Considerations

This relief qualifies under EU de minimis aid regulations and Revenue may disclose information on the tax relief claimed under Section 486 to government department and agencies paying other de minimis aid and, if requested,  to the EU commission.

Claims for start up company relief are made as part of the normal self assessment basis of tax are made under panel 9 of the annual corporation tax return form.

In conclusion, this entitles many new company formations Ireland to avail of a 0% Corporation tax in Ireland for the first 3 years of business.

Richard Lowry AITI, ACMA is a qualified Tax Consultant and Chartered Management Accountant and is Managing Partner of 24/7 Accounts.  24/7 Accounts with offices in Dublin and Kilkenny provides accounting, payroll, tax advice and an outsourced financial controller service to a variety of clients.

See www.247accounts.ie or contact Richard at +353 (0) 818 313247

New Company – Bright Future

When a new business begins it is important to start as they mean to continue.  The ethics of the business from day one should match the long term goals and principles of the owners.  An area of growing importance over the recent past has been the drive towards a greener environmentally friendly world.  It is good to know that as well as the moral benefit of being green, there are tax benefits available.

Accelerated Capital Allowances
The introduction of an Accelerated Capital Allowances (ACA) scheme in 2008 is an example of the initiatives that Revenue are using to promote a greener Ireland.  When a company buys assets which it will be using long term, such as motor vehicles, computers, etc they are normally allowed a tax deduction over a period of 8 years, claiming 12.5% of the cost each year.  However, with the ACA scheme, when a company invests in an approved environmentally friendly asset the company is allowed to claim the full cost of the asset in year 1. 

The benefit of this allowance should not be underestimated.  For example, if a company makes €50,000 in year one and buys an unapproved asset for €80,000 they will be taxed on €40,000 (€50,000 less 12.5% of €80,000).  Now, if the company invested €80,000 in an approved asset they would not pay any tax in year 1 and be able to carry forward €30,000 of the allowance to offset against the year 2 profits.

This is not just about saving your tax bill.  Long term the specified assets will save you money as they reduce your energy costs.   The list of approved assets is managed by and available from the Sustainable Energy Authority of Ireland.  There are ten categories of equipment that are eligible for the scheme.  They are

• Building Energy Management Systems (BEMS)
  Lighting
  Motors & Drivers
  Information and Communications Technology (ICT)
  Heating & Electricity Provision
  Process and Heating, Ventilation and Air-conditioning (HVAC) Control Systems
  Electric and Alternative Fuel Vehicles
  Catering and Hospitality
  Electromechanical Systems
  Refrigeration and Cooling

Motor Vehicles and CO2 Emissions
As many readers will be aware VRT on Motor Vehicles used was historically based on the engine size, but this changed from 1st July 2008.  Since then VRT is calculated with reference to CO2 emissions rather than the size of the engine.

In addition to the VRT change from 1st July 2008 Revenue changed the rules relating to tax deductions for cars purchased for use in a company’s trade.   Until 30th June 2008 when a car was purchased for use in a trade capital allowances were claimed on the lower of the cost of the vehicle or €24,000, irrespective of the make, model or emissions.

Where a car is purchased for use in a trade after 1st July 2008 the amount that capital allowances can be claimed on relates to the CO2 Emissions.  The emissions levels are broken down into three groups and can be broke down as follows: 

A car in group one will qualify for capital allowances on €24,000 even if this is greater than the actual cost of the car.  So a company that purchases a car ranked in Group 1 for €10,000 will receive tax deductions for €24,000.

A €10,000 car from group 2 would receive capital allowances on €5,000 being 50% of the €10,000.  A group 2 car costing €50,000 would only receive capital allowances on €12,000, whilst a car in group 3 would not receive any capital allowances regardless of the cost.

Commercial Advantages of Going Green

In addition to the tax advantages of environmentally friendly asset investment the long term cost reduction and marketability of being a green company should not be overlooked.  Reducing energy consumption reduces your costs long term and the intial outlet for the assets can be aided by the tax benefits.

Perhaps, most importantly, consumers are becoming increasing aware of the need to look after the environment and their role in that process. Being able to market your company as environmentally conscious may give you the edge over a less eco-friendly competitor.  Studies in 2008 showed that 20% of consumers have fully developed principles about shopping from green sources, whilst the majority accepted that sustainable issues were important and were prepared to act.  Only around 10% of people were indifferent.

Bruce Stanley ACA AITI QFA is Tax Manager, Byrne Curtin Kelly Accountants, based in Dublin. Bruce can be contacted on 01 6765333 or see www.bck.ie

Disclaimer: The above content is provided by a 3rd party. Company Bureau is not responsible and shall not be liable for any expense incurred as a result of any misrepresentations contained in the above information. You should therefore verify any information obtained in the above and seek paid professional advice before you act upon it. This page contains a link to an internet site maintained by a third party. Company Bureau accepts no responsibility for the privacy practices or content of other such sites. You assume sole responsibility for use of third party links.

The 31st October income tax deadline is fast approaching.  This date is the deadline for submitting your Income Tax Return for 2009 and for paying the balance of your 2009 income tax liability and your preliminary tax for 2010.  Preliminary tax should be either, 90% of the ultimate liability for the period, 100% of the liability for the preceding period or if you pay by direct debit 105% of the liability for the pre-preceding period.  You are liable to interest from the preliminary tax date if your payment is insufficient.

Tax is payable at the 20% rate for an individual’s first €36,400, a single parent’s first €40,400, €45,500 for a married couple with one income, €45,500 for a married couple with a maximum increase of €27,400.

In addition to the standard tax credits of €1,830 for a single person and €3,660 for a married couple.  A person employed under the PAYE tax system is entitled to a PAYE tax credit of €1,830.  Home carers tax credit of €900 can be claimed by married person who are jointly assessed and where one spouse works at home to care for children, the aged or incapacitated persons.  A tax credit is also claimable by an individual who employs a person to take care of a family member who is totally incapacitated by old age or infirmity.  The maximum allowance for 2009 is €50,000 and relief is granted at the marginal rate. 

An aged tax credit of €325 for a single/widowed person and €650 for a married person, is claimable by a person where he or his spouse is at least 65 years of age during the year of assessment.  A person over 65 has an increased exemption limit, (i.e. the amount under which she/he is exemption from paying tax), of €20,000.

Relief is available for medical expenses at the marginal rate in respect of certain medical incurred by an individual on behalf of him/herself, a relative or any other person over 65 years of age or permanently incapacitated (mental or physical). 

Other tax credits available are Widowed Parent, €4,000 first year after bereavement, €3,500 second year after bereavement, €2,500 fourth year after bereavement, €2,000 fifth year after bereavement, other years €600.  Incapacitated child tax credit is €3,660, dependent relative €80, blind person €1,830.  Health insurance premiums tax credits ranges from €200 to €1,250 depending on age from 50 upwards.

Rent paid to a maximum of €2,000 for a single person and €4,000 for a married couple aged under 55 years, and €4,000 and €8,000 respectively aged over 55 years of age.

A tax credit is allowed in respect of service charges, which are paid in full and on time by the person liable for them or by another person who resides on the premises to which the service charge relates. 

Tax relief is available for pensions contributions for a percentage of 15% to 40% of earning depending on age.  Pension contributions to be effective must be paid by the filing deadline.

Tax relief is also available in respect of tuition fees paid by an individual in respect of Third Level education in an approved college in respect of an approved course

If you are self-employed you are liable to PRSI at 3%, with the minimum contribution being €253.  If you earn less than €500 per week you will not have to pay the health levy.  If you earn greater than €500 per week then you income is liable to the health levy at 4%.  If you earn more that €1,443 you are liable to the health levy at a rate of 5%.

The income levy is payable on gross income from all sources before any tax reliefs, capital allowances, losses or pension contributions. From 1 May 2009 2%: rate for income up to €75,036, a rate of 4%: for income between €75,037 and €174,980, and a rate of 6%: for income in excess of €174,980.  For an individual whose income for a year does not exceed €15,028, or an individuals aged 65 or over whose annual income does not exceed €20,000, or a full medical card holders there is an exemption from the health levy.  Social welfare payments are also excluded from the income levy

The scrapage scheme provides for VRT relief of up to €1,500 when a new passenger car with CO2 emissions of not more than 140g/km (i.e. CO2 band A or B) is purchased and registered and another passenger car, over ten years old is scrapped. The scheme will run from 1 January 2010 to 31 December 2010.

Louise Carey is a qualified Tax Consultant/Auditor/ Accountant with an Office at 32 The Square, Listowel, Co Kerry.  She may be contact on 068 21109, email: lc@taxconsultant.ie, website: www.taxconsultant.ie 

Disclaimer: The above content is provided by a 3rd party. Company Bureau is not responsible and shall not be liable for any expense incurred as a result of any misrepresentations contained in the above information. You should therefore verify any information obtained in the above and seek paid professional advice before you act upon it. This page contains a link to an internet site maintained by a third party. Company Bureau accepts no responsibility for the privacy practices or content of other such sites. You assume sole responsibility for use of third party links.

A properly structured Australia private limited company (Pty) is an excellent corporate entity to conduct business in Australia and internationally. The following are the main advantages of Australia Company Formation:

1.  Australia company registration is easy and cost effective. Only one Director is required and foreign ownership is allowed.

2. No minimum capital requirements.

3. Easy place to do business and is also ranked as the 8th least corrupt country in the world by the 2009 Corruption Perceptions Index by Transparency Int.

4.  Main internatonal banks are located in Australia and easy to open international corporate bank accounts.

5.  Wide range of incentives available for entrepreneurs who register a company in Australia, including tax benefits and excellent network of tax treaties

It is a requirement for an Australian company to have a Director appointed who resides in Australia, as well as having a Registered Office Address located in Australia. Company Bureau can of course, assist you with these requirements, as well as help you with tax registration, virtual office (if required), provision of bank accounts, and legal and accounting services. For more information or to incorporate an Australian company today, Please don’t hesitate to Contact Us

The long awaited Criminal Justice (Money Laundering and Terrorist Financing) Bill , 2009 which will give effect to the 3rd Money Laundering EU Directive 2005/60/EC (“the 3MLD”) is due to be passed in the next few months, after a list of Proposed Report Stage Amendments was approved by the Seanad (Ireland’s upper house)

The 3MLD places greater emphasis and focus on monitoring and compliance for Professional Advisors in Ireland. The Bill contains 23 sections dedicated to monitoring and compliance, for example, Professional Advisors will be required to carry our full due diligence on their clients, and keep this on record for up to 7 years. Compliance with the bill will be enforced by competent authorities, for example the Law Society in respect of lawyers and the Financial Regulator in respect of credit and financial institutions. These authorities will be monitored for the purposes of compliance with the Bill and any breach of the compliance procedure will give rise to potential sanctions. It is incumbent on these authorities to report any suspicious transactions to An Garda Síochána (Irish Police) and the Revenue Commissioners and to have specific procedures in place to provide to the fullest extent possible for the prevention of money laundering and terrorist financing. Moreover, for financial and credit institutions, among others, breach of the money laundering control procedures will now give rise not just to potential criminal sanctions prescribed under the legislation but, in addition, the administrative sanctions operated by the Financial Regulator. It is anticipated that this Bill will be passed into law by Autumn 2010 at the latest. 

For more information on how this legislation will impact upon your professional organisation, please don’t hesitate to Contact Us

For new businesses, funding can be the single most important issue, especially for those with a high capital requirement at the outset. In reality, it is extremely difficult to secure funding from the banks in the current economic climate. The good news is though, there are a range of funding options currently available to entrepreneurs, especially for companies in the technology sector. Company Bureau will outline these options as follows:

For High-Potential Start-up’s (HPSU’s) Enterprise Ireland (EI) offers Start-up Funding to support their development. They have is called the “Innovative HPSU offer” where EI provides a financial contribution towards the Company’s business plan. The contribution is towards product development, services or processes which are technologically new or substantially improved when compared to the state of the art in its industry in the European Community and which carry a risk of technological or industrial failure. For more information, please see http://www.enterprise-ireland.com

Another option is to seek funding from the €53 million available to technology companies through the AIB Seed Capital Fund. The fund is managed by executives with extensive expertise in making seed and early stage investments, adding value and facilitating business success. For more information, please see http://www.aibseedcapitalfund.ie

Another potential source is Enterprise Equity Venture Capital Group. They are a national provider of venture capital to new and expanding companies throughout Ireland. As a professional venture capital funds manager, EEVC has invested €50 million in over 70 companies to date. Please see http://www.enterpriseequity.ie for more information.

Business Angels are an increasingly popular option to secure funding from private investors. This is due in some part to the TV series ‘The Dragon’s Den’  ‘The Business Angel Partnership’ is a new initiative aimed at matching Angels with start-up companies requiring venture capital. Please see https://www.businessangels.ie for more information.

City and County Enterprise Boards also provide a range of financial and business advisory supports to new entrepreneurs which are designed to assist with the setting-up of small scale businesses employing up to 10 people.

These financial supports include:

• Feasibility/Innovation Grants
• Priming Grants
• Business Expansion Grants
• Refundable Aid
• Equity Investment Options

For full details, please view the City and County Enterprise Boards website http://www.enterpriseboards.ie

Company Bureau would like to congratulate you on your business venture and we wish you every success. Should you require any assistance with the company secretarial requirements of such funding, (e.g. providing equity in return for funding) please don’t hesitate to contact us. We can of course, set up your new Irish Company in the quickest possible timeframe!

Physical Offices in Dublin. We’re not merely a web presence at a serviced office, or operating from a garage like some of our competitors!.

We’re members of the CRODisk scheme, and only 1 mile from the Companies Registration Office, which means no-one can set up a quicker!

We are one of the very few formation practices in Ireland with an in-house Commissioner for Oaths for witnessing legal documentation, which is required to incorporate a limited company in Ireland