The tax treatment of travel and subsistence expenses public consultation

Deloitte’s submission

The public consultation on the tax treatment of travel and subsistence expenses closed on 21 August 2015 and Deloitte were pleased to provide our insights to the Government on this important topic. 

We have suggested the following recommendations:

Place of work:
An employee’s normal place of work should be determined based on the facts.  The normal place of work should be the place where the employee or office holders perform most of the duties of their employment or office irrespective of whether that is their home or an employer’s office/workspace. This would remove the unnecessary complexity around this area. Currently Revenue recognise an employee or office holder’s home as a normal place of work only in exceptional circumstances. Furthermore this would realign the tax treatment of expenses of travel and subsistence with modern commercial reality. 

Board meetings and NEDs:
Where an individual is traveling from their normal place of work, be it their home or other location, to board meetings on which they are serving as a non-executive director, such expenses of travel should be reimbursed tax free. This should equally apply to both resident and non-resident non-executive directors. For Irish companies to demonstrate that they are implementing the best-in-class standards of corporate governance and regulation, the composition of NEDs who sit on Irish corporate boards must also be aligned to this concept of ‘best-in-class’. Therefore, our tax system should recognise this essential function and not deter highly skilled and knowledgeable individuals from sitting on boards.

Temporary workplaces:
A workplace should be recognised as a temporary workplace for up to 2 years absence from the normal place of work. Implementing a 24-month rule in respect of temporary assignments would allow for the alignment of both tax-free travel and subsistence expenses with other foreign jurisdictions. This would enhance Ireland’s position in respect of foreign direct investment on the global stage and thus continue domestic economic growth by helping to attract the necessary foreign skilled workforce.

Lorraine Griffin, Head of Tax at Deloitte said: ”The tax treatment of expenses of travel and subsistence is of significant importance as it sets out the circumstances in which an employee or office holder may receive expenses incurred in relation to their duties of employment tax free. Employees and office holders who genuinely incur expenses of travel and subsistence in connection with duties of their employment should not be out of pocket as a result. Clarity of position and equitable treatment for all employees and directors were the key themes throughout the Deloitte submission.”

Daryl Hanberry, Global Employer Services Tax Partner at Deloitte states: “Given the specialist skillsets and knowledge which non-executive directors bring to the boards of Irish companies in order to enhance and maintain good corporate governance and regulation, it is important that our tax code does not impose an inequitable cost on such individuals which may deter them from assuming these critical corporate positions. Our recommendations in this regard should be equally applied to both resident and non-resident non-executive directors.”



Tax Treatment of Expenses of Travel and Subsistence for Employees and Office Holders
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