Deloitte Ireland - Tax Guidance

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Revenue opinions - New Guidance

27 January 2017

Further guidance issued

Last year the Irish Revenue Commissioners issued e-briefs 79 and 89 of 2016 confirming the five year duration of Revenue opinions / confirmations.  As a result they had commenced contacting taxpayers with older opinions to review same.  On 26 January 2017 Revenue issued e-brief no. 8 / 2017 that brings about a form of “self-assessment” procedure which notes as follows:

“It is Revenue policy that all opinions / confirmations issued by Revenue are subject to a maximum validity period of 5 years, or such shorter period as may have been specified by Revenue when providing the opinion/confirmation. A taxpayer or tax practitioner who wishes to continue to rely on an opinion issued before 1 January 2012 for any transaction, or the whole or part of any period, after 1 January 2017, must:”

  • supply evidence of the opinion / confirmation, being a copy of a written communication which originated from Revenue, and
  • lodge a full application for the renewal or extension of the opinion/confirmation with the Revenue District dealing with the taxpayer’s affairs by 30 June 2017.

Therefore, if you have such opinions / confirmations (hereinafter ‘opinions’) then consideration must be given to whether reliance on same is to be preserved.  If that is the case then the procedures outlined in the Revenue e-brief should be followed; these are discussed briefly below.

What is a Revenue opinion?

Revenue note that an opinion on a particular matter will only be provided where the issues are complex, information is not readily available or there is genuine uncertainty in relation to the applicable tax rules as set down in the legislation. Therefore, an opinion provides Revenue’s view of the application of tax law to a particular situation.

The following examples are types of opinions that a taxpayer might wish to continue to rely on (given as part of the notes accompanying e-brief no.8 of 2017) as follows:

  • The existence or non-existence of a permanent establishment in the State
  • Profit attribution or transfer pricing methodology
  • Trading status
  • Residence status

Revenue further note that the above list is only intended to be illustrative rather than an exhaustive list of opinions that may have continuing relevance.

Revenue review

All opinions issued by Revenue are now subject to a maximum validity period of five years, or such shorter period as may have been specified when providing the opinion. All opinions that were issued more than five years ago, and which taxpayers wish to continue to rely on, are subject to review.  Taxpayers must notify Revenue of opinions being relied upon and which they want to continue to rely on where they were received more than five years after their issue. 

Therefore, as respects any transaction, or the whole or part of any period, after 1 January 2017, taxpayers may not continue to rely on any opinion, which was issued before 1 January 2012 (and had not already lapsed or ceased to have effect before 1 January 2017), unless they have, as noted earlier —

  • supplied evidence of the opinion, being a copy of a written communication which originated from Revenue, and
  • lodged a full application for the renewal or extension of the opinion with the Revenue District dealing with the taxpayer’s affairs by 30 June 2017

Renewal and extension applications must comply with the requirements contained within the various Revenue guidelines on Revenue opinions.  

Where such application has been made by 30 June 2017 then the Revenue District dealing with the taxpayer’s affairs will provide an early acknowledgement of the receipt of each application for the renewal or extension of the opinion. In addition, that will confirm where certain terms are met, the opinion will continue to have effect until Revenue has following a review of the application, provided a written response. This response will either accept, accept with amendments or reject the renewal or extension application.

Once evidence of the opinion has been provided and a renewal or extension application has been made by 30 June 2017, provided there has not been a material change in the facts and circumstances on which the opinion is based or it had not otherwise ceased to have effect, then the opinion will continue to apply until such time as Revenue has reviewed the application for its renewal or extension.  

Where, on reviewing an opinion as a result of the above application and Revenue gives written notice of the withdrawal or amendment of the opinion concerned then this notice will be stated to apply to transactions and chargeable periods to the extent that they are subsequent to the notice. 

E-brief no.8 of 2017 notes that Revenue will complete reviews of applications and respond to taxpayers or their tax agents on a timely basis. Following the 30 June 2017 deadline for renewal or extension applications, an estimated response date will be provided by Revenue.

Where an application for the renewal or extension of an opinion is not made by the required date of 30 June 2017 then the opinion, which had not already ceased to have effect, cannot be relied on by the taxpayer from 1 January 2017.  

Revenue has already commenced a review of opinions that were issued more than five years ago and has already made contact with some taxpayers. Where a taxpayer has been contacted by Revenue before 30 June 2017 regarding a review of an opinion issued prior to 1 January 2012 and before the taxpayer has made any application for the renewal or extension of it; then unless in the course of correspondence with Revenue the taxpayer has made a written application to renew or extend the opinion then the taxpayer should still follow the above procedures if the taxpayer wishes to continue to rely on the opinion/confirmation after 1 January 2017.

Exchange of information with other tax authorities

In accordance with EU and OECD initiatives on exchange of information on "Tax Rulings", any opinion provided by Revenue, including a renewal or extension of an existing opinion, may be subject to disclosure to other tax authorities.  

Action required

Should you have an opinion from Revenue that was issued more than five years ago and if reliance on same is still required then the above procedures must be adhered to before the deadline of 30 June 2017.  If you have any questions then please contact your usual Deloitte contact.  

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