IRISH TAXATION ASSIGNMENT
YOU must FOLLOWING THE TABLE BLOW WHEN YOU WRITE THE ASSIGNMENT PLEASE
Table of Contents
do not write the introduction 1
(i). Capital Gain Group. 2
Claw Back rule of CGG: 3
Comparison to the capital gain groups conditions to AHL case:- 3
Participation Exemption (S626B):- 3
Comparison to the Participation Exception to AHL Case:- 4
Recommendations 5
(ii)Value Added Tax: 6
VAT on Property (Change of Supply): 6
Sale of Property: 6
Lessing property: 6
Transitional Rules: 7
PALM and OAK property transfer Case: 7
First scenario: PLAM LTD opt to charge VAT. 7
Second Scenario: PALM LTD opted not to charge VAT. 7
(iii) Revenue Audit: 8
Revenue Audit Definition: 9
best practice to mitigate Revenue Audit Penalties 9
(iv). Issues outlined in the notification of the Revenue Audit: 10
(A). Bonus payment for three managers: 10
(B). Supply and installation of storage units: 11
(C). An employee worked in Germany: 11
(D). Purchase of software package from Spain: 12
Conclusion 13
Bibliography 14
VERY INPMORTANT NOTES: – PLEASE DO LIKE THAT
Capital Gain Group.
……………………………………..
Claw Back rule of CGG:
Write details about it ………………………………………………………
Participation Exemption (S626B):-
Write details about it ………………………………………….
Participation Exemption (S600):-
Write details about it ……………………………………….
Comparison to the Participation Exception to AHL Case:-
you must explain all participation exception and analysis them applying to the cases in Q.
Write details about it ………………………………………..
Rewrite all the red sentences blow and add some more information about the participation.
……………………………………………………………………………………………………………………………………………………………………………………
The main activity of BEECH LTD is a trading company in addition to being a member of a trading group so that this condition is also met.
Looking at the provided extract of the BEECH LTD Draft Summarised Statement of Financial Position, we can say that the Value of land and Buildings in the disposed of company constitute a percentage of 85% of the company’s net assets, which contrary to the condition where it should not derive the greatest of the net asset (50%).
NOTES THAT PLEASE
Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
the calculation
Proceeds from the Disposal of Shares in BEECH LTD €1,200,000.000
Shares at cost (€534,000.000)
Chargeable Gain € 666,000.000
€666,000.000*33/12.5= €1,758,240.00
€1,758,240.000*12.5%=€219,780.000
It can be also calculated in this way as follows:
€ 666,000*33/100 = € 219,780.000
In 2011,OAK LTD transferred a warehouse unit to BEECH ,As they are in a Capital Gain group the asset was transferred at cost, therefore, no chargeable gain or loss has arisen at the date of transfer , currently BEECH LTD is under the process of being sold to the French Investment Company, this will trigger a clawback as the asset was transferred in 2011 and the sale will take place on 31st / may/2017 BEECH holding the asset for only 6 years 4 years less than the Clawback period of 10 years.as a result, BEECH LTD is entitled to pay Corporate Tax on the chargeable gain at the tax rate in 2011which is 25%(Revenue 2014).
Warehouse Fair Value €400,000.000
Warehouse Cost (€320,000.000)
Chargeable Gain €80,000.000
€80,000.000*25/12.5= €160,000.000
€160,000*12.5/100= €20,000.000
Another way of calculating a probable Chargeable Gain Tax:
€8,000.000*.25= €20,000.000
Recommendations
Write ALL details about it ………………………………………..
(ii)Value Added Tax:
Write details about it ………………………………………..
VAT on Property (Change of Supply):
Write details about it ………………………………………..
Sale of Property:
Write details about it ………………………………………..
.
Lessing property:
Write details about the cases blow
and LESSING PROPERTY APPLYING TO IRISH TAX LOW .………………………………………..
? Residential property letting.
? Letting property to a connected party.
Transitional Rules:
Write details about it ………………………………………..
PALM and OAK property transfer Case:
Write all details about it ………………………………………..
Triggers two scenarios
Write details about it ………………………………………..
First scenario: PLAM LTD opt to charge VAT.
Write details about it ………………………………………..
In this Case, as PALM LTD has claimed back the full amount of VAT, Therefore, they are not entitled to repay any of the VAT as they will keep on Charging VAT
Second Scenario: PALM LTD opted not to charge VAT.
Notes<
1 -Rewrite all the red sentences blow and add some more information about the participation
2 – Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
What happened in this situation is that PALM LTD has claimed back more than what it’s entitled to from the VAT and they must repay some of the VAT to Revenue from that date of letting the unit which is 31st of May 2017.Therefore the repair amount is calculated as follows:
Initial Period
1st /Oct /2010 30th/Sep/2011
2nd Interval 1st / June/2011 31st / May /2012
3rd Interval 1st /June /2012 31st /May /2013
4th Interval 1st /June /2013 31st /May/2014
5th Interval 1st/June/2014 31st/May/2015
6th Interval 1st /June /2015 31st /May /2016
7th Interval 1st /June/2016 31st /May/2017 Exempt Supply
€1,589,000.000 *13.5%=€189,000.000
1.135
€189,000.000 * 13+1 = €132,000.000
20
Once the unit is being leased out on 31st /May /2017, PALM LTD is entitled to repay some of the VAT from that date to revenue under this scenario.
Therefore, I would recommend Mr./ Michael to opt to charge VAT so would not be entitled to repay back €132,000.000 to Revenue in bulk, instead, he can invest this money in the business to generate more income.
(iii) Revenue Audit:
Applying to Irish tax law
Write all details about it ………………………………………..
best practice to mitigate Revenue Audit Penalties:
Write all details about it ………………………………………..
Note* A Qualifying Prompted Disclosure Can only be make before the commencement of the Audit, if it was made while the Revenue Carrying out the Audit process, Penalties would not be reduced, also a taxpayer should take into a consideration that the more Qualifying Disclosures he make, the less effective it become to reduce penalties(Keegan Brian 2015)
Issues outlined in the notification of the Revenue Audit:
Write all details about it ………………………………………..
Please find my analysis of the tax implications of each of the outlined errors below:
(A). Bonus payment for three managers:
Write all details about it ………………………………………..
A total of €120,000 (€40,000*3) paid as bonuses to OAK’s three senior managers and was not subjected to tax, the amount was not subjected to any taxes when it is liable for PRSI and USC.Therefore the Accountant should have treated the payment as a BIK instead.
As theses three managers are top rate taxpayers the amount of €120,000 should be taxed at the income tax rate of 40%, also will be liable to PRSI at 8.5%and USC at 3.5%, in total it will be liable to tax at 52%.
Tax Underplayed= (€40,000*3) *52/100= €42,400.000
The default category is Carless with a significant consequence so the penalty will be 20% of the underpaid tax in addition to interest.
(B). Supply and installation of storage units:
To answer this case, First and for most I will briefly explain the TWO-THIRDS RULE.
Write all details about it ………………………………………..
TWO-THIRDS RULE is applicable in the VAT implications were the cost of material needed to provide a service constitutes 2/3 of the total cost of the service provided, when this is the case, A Vat rate of 23 % must be applied instead of 13.5%.
OAK LTD in charging VAT on the supply and installing storage units to its customers did not take into consideration the cost of material then need to provide the supply and installation services, Therefore, they did not use the TWO-THIRDS RULE and 13.5% VAT rate was applied.
.
(C). Employees worked in Germany and UK:
Write all details about it ………………………………………..
(D). Purchase of software package from Spain:
Write all details about it ………………………………………..
Conclusion
Write all details about it ………………………………………..
IRISH TAXATION ASSIGNMENT
YOU must FOLLOWING THE TABLE BLOW WHEN YOU WRITE THE ASSIGNMENT PLEASE
Table of Contents
Introduction 1
(i). Capital Gain Group. 2
Claw Back rule of CGG: 3
Comparison to the capital gain groups conditions to AHL case:- 3
Participation Exemption (S626B):- 3
Comparison to the Participation Exception to AHL Case:- 4
Recommendations 5
(ii)Value Added Tax: 6
VAT on Property (Change of Supply): 6
Sale of Property: 6
Lessing property: 6
Transitional Rules: 7
PALM and OAK property transfer Case: 7
First scenario: PLAM LTD opt to charge VAT. 7
Second Scenario: PALM LTD opted not to charge VAT. 7
(iii) Revenue Audit: 8
Revenue Audit Definition: 9
best practice to mitigate Revenue Audit Penalties 9
(iv). Issues outlined in the notification of the Revenue Audit: 10
(A). Bonus payment for three managers: 10
(B). Supply and installation of storage units: 11
(C). An employee worked in Germany: 11
(D). Purchase of software package from Spain: 12
Conclusion 13
Bibliography 14
VERY INPMORTANT NOTES: – PLEASE DO LIKE THAT
Introduction
REQUIRED 1
Use the same design and write the introduction about the assignment Q.
Capital Gain Group.
……………………………………..
Claw Back rule of CGG:
Write details about it ………………………………………………………
Participation Exemption (S626B):-
Write details about it ………………………………………….
Participation Exemption (S600):-
Write details about it ……………………………………….
Comparison to the Participation Exception to AHL Case:-
you must explain all participation exception and analysis them applying to the cases in Q.
Write details about it ………………………………………..
Rewrite all the red sentences blow and add some more information about the participation.
……………………………………………………………………………………………………………………………………………………………………………………
The main activity of BEECH LTD is a trading company in addition to being a member of a trading group so that this condition is also met.
Looking at the provided extract of the BEECH LTD Draft Summarised Statement of Financial Position, we can say that the Value of land and Buildings in the disposed of company constitute a percentage of 85% of the company’s net assets, which contrary to the condition where it should not derive the greatest of the net asset (50%).
NOTES THAT PLEASE
Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
the calculation
Proceeds from the Disposal of Shares in BEECH LTD €1,200,000.000
Shares at cost (€534,000.000)
Chargeable Gain € 666,000.000
€666,000.000*33/12.5= €1,758,240.00
€1,758,240.000*12.5%=€219,780.000
It can be also calculated in this way as follows:
€ 666,000*33/100 = € 219,780.000
In 2011,OAK LTD transferred a warehouse unit to BEECH ,As they are in a Capital Gain group the asset was transferred at cost, therefore, no chargeable gain or loss has arisen at the date of transfer , currently BEECH LTD is under the process of being sold to the French Investment Company, this will trigger a clawback as the asset was transferred in 2011 and the sale will take place on 31st / may/2017 BEECH holding the asset for only 6 years 4 years less than the Clawback period of 10 years.as a result, BEECH LTD is entitled to pay Corporate Tax on the chargeable gain at the tax rate in 2011which is 25%(Revenue 2014).
Warehouse Fair Value €400,000.000
Warehouse Cost (€320,000.000)
Chargeable Gain €80,000.000
€80,000.000*25/12.5= €160,000.000
€160,000*12.5/100= €20,000.000
Another way of calculating a probable Chargeable Gain Tax:
€8,000.000*.25= €20,000.000
Recommendations
Write ALL details about it ………………………………………..
(ii)Value Added Tax:
Write details about it ………………………………………..
VAT on Property (Change of Supply):
Write details about it ………………………………………..
Sale of Property:
Write details about it ………………………………………..
.
Lessing property:
Write details about the cases blow
and LESSING PROPERTY APPLYING TO IRISH TAX LOW .………………………………………..
? Residential property letting.
? Letting property to a connected party.
Transitional Rules:
Write details about it ………………………………………..
PALM and OAK property transfer Case:
Write all details about it ………………………………………..
Triggers two scenarios
Write details about it ………………………………………..
First scenario: PLAM LTD opt to charge VAT.
Write details about it ………………………………………..
In this Case, as PALM LTD has claimed back the full amount of VAT, Therefore, they are not entitled to repay any of the VAT as they will keep on Charging VAT
Second Scenario: PALM LTD opted not to charge VAT.
Notes<
1 -Rewrite all the red sentences blow and add some more information about the participation
2 – Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
What happened in this situation is that PALM LTD has claimed back more than what it’s entitled to from the VAT and they must repay some of the VAT to Revenue from that date of letting the unit which is 31st of May 2017.Therefore the repair amount is calculated as follows:
Initial Period
1st /Oct /2010 30th/Sep/2011
2nd Interval 1st / June/2011 31st / May /2012
3rd Interval 1st /June /2012 31st /May /2013
4th Interval 1st /June /2013 31st /May/2014
5th Interval 1st/June/2014 31st/May/2015
6th Interval 1st /June /2015 31st /May /2016
7th Interval 1st /June/2016 31st /May/2017 Exempt Supply
€1,589,000.000 *13.5%=€189,000.000
1.135
€189,000.000 * 13+1 = €132,000.000
20
Once the unit is being leased out on 31st /May /2017, PALM LTD is entitled to repay some of the VAT from that date to revenue under this scenario.
Therefore, I would recommend Mr./ Michael to opt to charge VAT so would not be entitled to repay back €132,000.000 to Revenue in bulk, instead, he can invest this money in the business to generate more income.
(iii) Revenue Audit:
Applying to Irish tax law
Write all details about it ………………………………………..
best practice to mitigate Revenue Audit Penalties:
Write all details about it ………………………………………..
Note* A Qualifying Prompted Disclosure Can only be make before the commencement of the Audit, if it was made while the Revenue Carrying out the Audit process, Penalties would not be reduced, also a taxpayer should take into a consideration that the more Qualifying Disclosures he make, the less effective it become to reduce penalties(Keegan Brian 2015)
Issues outlined in the notification of the Revenue Audit:
Write all details about it ………………………………………..
Please find my analysis of the tax implications of each of the outlined errors below:
(A). Bonus payment for three managers:
Write all details about it ………………………………………..
A total of €120,000 (€40,000*3) paid as bonuses to OAK’s three senior managers and was not subjected to tax, the amount was not subjected to any taxes when it is liable for PRSI and USC.Therefore the Accountant should have treated the payment as a BIK instead.
As theses three managers are top rate taxpayers the amount of €120,000 should be taxed at the income tax rate of 40%, also will be liable to PRSI at 8.5%and USC at 3.5%, in total it will be liable to tax at 52%.
Tax Underplayed= (€40,000*3) *52/100= €42,400.000
The default category is Carless with a significant consequence so the penalty will be 20% of the underpaid tax in addition to interest.
(B). Supply and installation of storage units:
To answer this case, First and for most I will briefly explain the TWO-THIRDS RULE.
Write all details about it ………………………………………..
TWO-THIRDS RULE is applicable in the VAT implications were the cost of material needed to provide a service constitutes 2/3 of the total cost of the service provided, when this is the case, A Vat rate of 23 % must be applied instead of 13.5%.
OAK LTD in charging VAT on the supply and installing storage units to its customers did not take into consideration the cost of material then need to provide the supply and installation services, Therefore, they did not use the TWO-THIRDS RULE and 13.5% VAT rate was applied.
.
(C). Employees worked in Germany and UK:
Write all details about it ………………………………………..
(D). Purchase of software package from Spain:
Write all details about it ………………………………………..
Conclusion
Write all details about it ………………………………………..
IRISH TAXATION ASSIGNMENT
YOU must FOLLOWING THE TABLE BLOW WHEN YOU WRITE THE ASSIGNMENT PLEASE
Table of Contents
Introduction 1
(i). Capital Gain Group. 2
Claw Back rule of CGG: 3
Comparison to the capital gain groups conditions to AHL case:- 3
Participation Exemption (S626B):- 3
Comparison to the Participation Exception to AHL Case:- 4
Recommendations 5
(ii)Value Added Tax: 6
VAT on Property (Change of Supply): 6
Sale of Property: 6
Lessing property: 6
Transitional Rules: 7
PALM and OAK property transfer Case: 7
First scenario: PLAM LTD opt to charge VAT. 7
Second Scenario: PALM LTD opted not to charge VAT. 7
(iii) Revenue Audit: 8
Revenue Audit Definition: 9
best practice to mitigate Revenue Audit Penalties 9
(iv). Issues outlined in the notification of the Revenue Audit: 10
(A). Bonus payment for three managers: 10
(B). Supply and installation of storage units: 11
(C). An employee worked in Germany: 11
(D). Purchase of software package from Spain: 12
Conclusion 13
Bibliography 14
VERY INPMORTANT NOTES: – PLEASE DO LIKE THAT
Introduction
REQUIRED 1
Use the same design and write the introduction about the assignment Q.
Capital Gain Group.
……………………………………..
Claw Back rule of CGG:
Write details about it ………………………………………………………
Participation Exemption (S626B):-
Write details about it ………………………………………….
Participation Exemption (S600):-
Write details about it ……………………………………….
Comparison to the Participation Exception to AHL Case:-
you must explain all participation exception and analysis them applying to the cases in Q.
Write details about it ………………………………………..
Rewrite all the red sentences blow and add some more information about the participation.
……………………………………………………………………………………………………………………………………………………………………………………
The main activity of BEECH LTD is a trading company in addition to being a member of a trading group so that this condition is also met.
Looking at the provided extract of the BEECH LTD Draft Summarised Statement of Financial Position, we can say that the Value of land and Buildings in the disposed of company constitute a percentage of 85% of the company’s net assets, which contrary to the condition where it should not derive the greatest of the net asset (50%).
NOTES THAT PLEASE
Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
the calculation
Proceeds from the Disposal of Shares in BEECH LTD €1,200,000.000
Shares at cost (€534,000.000)
Chargeable Gain € 666,000.000
€666,000.000*33/12.5= €1,758,240.00
€1,758,240.000*12.5%=€219,780.000
It can be also calculated in this way as follows:
€ 666,000*33/100 = € 219,780.000
In 2011,OAK LTD transferred a warehouse unit to BEECH ,As they are in a Capital Gain group the asset was transferred at cost, therefore, no chargeable gain or loss has arisen at the date of transfer , currently BEECH LTD is under the process of being sold to the French Investment Company, this will trigger a clawback as the asset was transferred in 2011 and the sale will take place on 31st / may/2017 BEECH holding the asset for only 6 years 4 years less than the Clawback period of 10 years.as a result, BEECH LTD is entitled to pay Corporate Tax on the chargeable gain at the tax rate in 2011which is 25%(Revenue 2014).
Warehouse Fair Value €400,000.000
Warehouse Cost (€320,000.000)
Chargeable Gain €80,000.000
€80,000.000*25/12.5= €160,000.000
€160,000*12.5/100= €20,000.000
Another way of calculating a probable Chargeable Gain Tax:
€8,000.000*.25= €20,000.000
Recommendations
Write ALL details about it ………………………………………..
(ii)Value Added Tax:
Write details about it ………………………………………..
VAT on Property (Change of Supply):
Write details about it ………………………………………..
Sale of Property:
Write details about it ………………………………………..
.
Lessing property:
Write details about the cases blow
and LESSING PROPERTY APPLYING TO IRISH TAX LOW .………………………………………..
? Residential property letting.
? Letting property to a connected party.
Transitional Rules:
Write details about it ………………………………………..
PALM and OAK property transfer Case:
Write all details about it ………………………………………..
Triggers two scenarios
Write details about it ………………………………………..
First scenario: PLAM LTD opt to charge VAT.
Write details about it ………………………………………..
In this Case, as PALM LTD has claimed back the full amount of VAT, Therefore, they are not entitled to repay any of the VAT as they will keep on Charging VAT
Second Scenario: PALM LTD opted not to charge VAT.
Notes<
1 -Rewrite all the red sentences blow and add some more information about the participation
2 – Regarding the calculation parts I sure it is correct just I need you to rephrase and analysis the position of the firm.
What happened in this situation is that PALM LTD has claimed back more than what it’s entitled to from the VAT and they must repay some of the VAT to Revenue from that date of letting the unit which is 31st of May 2017.Therefore the repair amount is calculated as follows:
Initial Period
1st /Oct /2010 30th/Sep/2011
2nd Interval 1st / June/2011 31st / May /2012
3rd Interval 1st /June /2012 31st /May /2013
4th Interval 1st /June /2013 31st /May/2014
5th Interval 1st/June/2014 31st/May/2015
6th Interval 1st /June /2015 31st /May /2016
7th Interval 1st /June/2016 31st /May/2017 Exempt Supply
€1,589,000.000 *13.5%=€189,000.000
1.135
€189,000.000 * 13+1 = €132,000.000
20
Once the unit is being leased out on 31st /May /2017, PALM LTD is entitled to repay some of the VAT from that date to revenue under this scenario.
Therefore, I would recommend Mr./ Michael to opt to charge VAT so would not be entitled to repay back €132,000.000 to Revenue in bulk, instead, he can invest this money in the business to generate more income.
(iii) Revenue Audit:
Applying to Irish tax law
Write all details about it ………………………………………..
best practice to mitigate Revenue Audit Penalties:
Write all details about it ………………………………………..
Note* A Qualifying Prompted Disclosure Can only be make before the commencement of the Audit, if it was made while the Revenue Carrying out the Audit process, Penalties would not be reduced, also a taxpayer should take into a consideration that the more Qualifying Disclosures he make, the less effective it become to reduce penalties(Keegan Brian 2015)
Issues outlined in the notification of the Revenue Audit:
Write all details about it ………………………………………..
Please find my analysis of the tax implications of each of the outlined errors below:
(A). Bonus payment for three managers:
Write all details about it ………………………………………..
A total of €120,000 (€40,000*3) paid as bonuses to OAK’s three senior managers and was not subjected to tax, the amount was not subjected to any taxes when it is liable for PRSI and USC.Therefore the Accountant should have treated the payment as a BIK instead.
As theses three managers are top rate taxpayers the amount of €120,000 should be taxed at the income tax rate of 40%, also will be liable to PRSI at 8.5%and USC at 3.5%, in total it will be liable to tax at 52%.
Tax Underplayed= (€40,000*3) *52/100= €42,400.000
The default category is Carless with a significant consequence so the penalty will be 20% of the underpaid tax in addition to interest.
(B). Supply and installation of storage units:
To answer this case, First and for most I will briefly explain the TWO-THIRDS RULE.
Write all details about it ………………………………………..
TWO-THIRDS RULE is applicable in the VAT implications were the cost of material needed to provide a service constitutes 2/3 of the total cost of the service provided, when this is the case, A Vat rate of 23 % must be applied instead of 13.5%.
OAK LTD in charging VAT on the supply and installing storage units to its customers did not take into consideration the cost of material then need to provide the supply and installation services, Therefore, they did not use the TWO-THIRDS RULE and 13.5% VAT rate was applied.
.
(C). Employees worked in Germany and UK:
Write all details about it ………………………………………..
(D). Purchase of software package from Spain:
Write all details about it ………………………………………..
Conclusion
Write all details about it ………………………………………..
