S.I. No. 576/2012 - Income Tax and Corporation Tax (Relevant Contracts Tax) Regulations 2012

ARRANGEMENT OF REGULATIONS

PART 1 GENERAL

1.

2.

PART 2 REGISTRATION

3.

PART 3 NOTIFICATIONS TO REVENUE

4.

5.

PART 4 DEDUCTION AUTHORISATIONS AND DEDUCTION SUMMARIES

6.

7.

PART 5 RETURNS AND ADJUSTMENT TO LIABILITY

8.

9.

PART 6 MISCELLANEOUS

10.

11.

12.

S.I. No. 576 of 2012

INCOME TAX AND CORPORATION TAX (RELEVANT CONTRACTS TAX) REGULATIONS 2012

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 11th January, 2013.

The Revenue Commissioners, in exercise of the powers conferred on them by sections 530B, 530C, 530D, 530F, 530J, 530K, 530M, 530R and 530S (all inserted by section 20 of the Finance Act 2011 (No. 6 of 2011)) of the Taxes Consolidation Act 1997 (No. 39 of 1997), hereby make the following regulations:

PART 1 GENERAL

Citation

Interpretation

“Act” means Taxes Consolidation Act 1997 (No. 39 of 1997);

“deduction summary” has the meaning assigned to it by section 530(1) of the Act;

“payment notification” means a notification by a principal under section 530C(1) of the Act of a principal’s intention to make a relevant payment;

“PPS number”, in relation to an individual, means that individual’s personal public service number within the meaning of section 262 of the Social Welfare Consolidation Act 2005 (No. 26 of 2005);

“principal” has the meaning assigned to it by section 530(1) of the Act;

“RCT service” means the electronic system made available by the Revenue Commissioners to allow principals to fulfil their obligations under sections 530A to 530V of the Act and under any Regulations made thereunder, and to allow for electronic communication between the Revenue Commissioners, principals, subcontractors and others pursuant to those obligations and includes any enhancements or other changes made to that system and any replacement system;

“Regulations of 2011” mean Income Tax and Corporation Tax (Relevant Contracts Tax) Regulations 2011 ( S.I. No. 651 of 2011 );

“relevant contract” has the meaning assigned to it by section 530(1) of the Act;

“relevant operations” has the meaning assigned to it by section 530(1) of the Act;

“relevant payment” has the meaning assigned to it by section 530(1) of the Act;

“return period” has the meaning assigned to it by section 530(1) of the Act;

“Revenue officer” has the meaning assigned to it by section 530(1) of the Act;

“subcontractor” has the meaning assigned to it by section 530(1) of the Act;

“tax reference number” means—

• (a) in the case of an individual, that individual’s PPS number or his or her registration number for the purposes of value-added tax, or

• (b) in the case of a company, the reference number stated on any return of profits form or notice of assessment issued to that company by the Revenue Commissioners, or the registration number of the company for the purposes of value-added tax.

“technology systems failure” has the meaning assigned to it by section 530(1) of the Act.

PART 2 REGISTRATION

Register of principals

• (2) For the purposes of paragraph (1), each principal shall provide the Revenue Commissioners with all particulars required by the Revenue Commissioners for the purposes of registering the person as a principal.

• (3) A person who ceases to be a principal to whom section 530A of the Act applies shall notify the Revenue Commissioners of such cessation by written or electronic means and shall specify the date of the cessation in the notification.

• (4) Where, in the opinion of a Revenue officer, a person has ceased to be a principal to whom section 530A of the Act applies, the Revenue officer shall, by written or electronic means, notify that person of the intention to cancel that person’s registration as a principal and such cancellation shall be effected as on and from 21 days from the date of the notification, unless, within that period, the person satisfies the Revenue officer that he or she is still a principal.

• (5) Where—

• (a) a person has made a notification under paragraph (3), or

• (b) a person’s registration under section 530J of the Act has been cancelled under paragraph (4),

requirements in relation to any future registration under section 530J shall apply as if that person had never previously been registered as a principal.

PART 3 NOTIFICATIONS TO REVENUE

Contract notification and declaration by principal

• (2) Where the Revenue Commissioners are unable to verify the identity of a subcontractor by reference to the name and tax reference number supplied by a principal, the RCT service shall require the principal to inform the subcontractor in writing within 7 days or before making a relevant payment to the subcontractor, whichever is the earlier, that—

• (a) the Revenue Commissioners were unable to verify the identity of the subcontractor,

• (b) tax at 35 per cent will be deducted from payments to the subcontractor, and

• (c) the subcontractor should contact the Revenue Commissioners with a view to clarifying his or her identity.

• (3) Where a principal does not indicate that the principal is satisfied that a contract is not a labour only contract, the principal shall provide the Revenue Commissioners with such other information, in relation to the contract, as may be required by the RCT service.

• (4) On receipt of the information referred to in paragraph (1), the RCT service shall provide an acknowledgement to the principal, which communication shall be deemed to be an acknowledgement issued by the Revenue Commissioners. The acknowledgement shall include, for information purposes only, the rate of tax last notified to the subcontractor concerned under section 530I of the Act. This rate shall not be taken as the rate of RCT applicable to payments to be made under the contract concerned.

• (5) Where the information referred to in section 530B(1)(a) of the Act changes in relation to—

• (a) the estimated contract value,

• (b) the contract duration, or

• (c) the location or locations at which relevant operations under the contract are to take place,

the principal shall, using the appropriate portal of the RCT service, notify the Revenue Commissioners of each such change to the contract.

• (6) Where a principal notifies the Revenue Commissioners of a contract under section 530B(1) of the Act and the Revenue Commissioners are satisfied as to the identity of the subcontractor, the Revenue Commissioners shall, by electronic or other means, notify the subcontractor of the details of the contract as supplied by the principal. The notification shall include the rate of tax notified to the principal under paragraph (4).

• (7) Where a principal notifies the Revenue Commissioners under paragraph (5), the Revenue Commissioners shall, by electronic or other means, notify the subcontractor in relation to any changes referred to in that paragraph.

Notification of relevant payment by principal

• (2) For the purposes of paragraph (1) and subject to paragraph (3), details of the following matters shall be included in a payment notification:

• (a) the identity of the subcontractor, including name and tax reference number;

• (b) identification of the contract to which the payment relates;

• (c) such other information as may be required by the RCT service.

• (3) Where a principal has entered into more than one relevant contract with a subcontractor, the principal shall—

• (a) where the payment to be made is in respect of a single contract, in giving a payment notification, identify the contract in respect of which the payment will be made, and

• (b) where the payment to be made is in respect of more than one contract with that subcontractor, give separate payment notifications each identifying only that part of the payment that refers to the related contract.

• (4) Where a principal anticipates that a relevant payment is not going to be made before the end of the return period in which the payment notification is given, the principal shall, before the end of the return period, cancel the payment notification using the appropriate portal of the RCT service, and the payment notification concerned shall be deemed not to have been given.

• (5) Where a principal cancels a payment notification under paragraph (4), and where tax was due to be deducted from the payment, the Revenue Commissioners shall, by electronic or other means, notify the subcontractor of the cancellation of the payment notification by the principal.

PART 4 DEDUCTION AUTHORISATIONS AND DEDUCTION SUMMARIES

Deduction authorisations

• (2) A deduction authorisation shall only be valid until—

• (a) the making by the principal concerned of the payment concerned,

• (b) the due date relating to the return period within which the deduction authorisation was issued,

• (c) the making by the principal concerned of the return for the return period within which the deduction authorisation was issued, or

• (d) the cancellation of the related payment notification in accordance with Regulation 5(4),

whichever is the earliest.

• (3) A deduction authorisation shall be valid only in respect of the subcontractor named on it and the relevant payment to which it relates.

• (4) On accessing a deduction authorisation, the principal concerned shall examine its contents to ensure that the subcontractor named on the deduction authorisation is a party to the relevant contract to which it relates.

• (5) The Revenue Commissioners may, by electronic or other means, make available to a subcontractor details of the information contained in deduction authorisations relating to that subcontractor.

Deduction summaries

• (2) A deduction summary in respect of a return period shall include—

• (a) details in relation to all relevant payments, if any, notified by that principal, which are the subject of a valid deduction authorisation at the time of issue of the deduction summary (in these Regulations, the details on a deduction summary in relation to each such relevant payment shall be referred to as a “line item”),

• (b) details of any relevant payment of which, during the return period, the principal has notified the Revenue Commissioners under section 530F(7) of the Act,

• (c) details of any relevant payment to which Regulation 8(5) relates,

• (d) the aggregate amount of tax that is, based on the details in the deduction summary, payable by the principal in respect of the return period, and

• (e) information on how to accept, amend or supplement the information in the deduction summary for the purpose of making a return referred to in Regulation 8.

PART 5 RETURNS AND ADJUSTMENT TO LIABILITY

Returns

• (2) Where a deduction summary is issued to a principal under section 530D(3) of the Act and the details on that deduction summary do not accurately reflect all relevant payments made by the principal relating to the return period concerned or the liability of the principal to tax on those payments, the principal shall ensure that all relevant payments relating to the return period and the associated tax liability are accurately reflected on the return required under section 530K(1) of the Act, and paragraphs (3) to (9) shall apply.

• (3) Subject to paragraph (4) and Regulation 5(4), where a payment notified to the Revenue Commissioners during a return period under section 530C of the Act is not made by the earlier of—

• (a) the due date relating to the return period within which it was notified, and

• (b) the making by the principal concerned of the return for the return period in which the payment was notified,

the principal shall cancel the line item concerned and reflect the fact that the payment has not been made on the return for that return period.

• (4) Where a payment is made to a subcontractor for relevant operations in respect of which a payment notification is given, and the amount of the payment differs from the amount specified in the payment notification due to exceptional circumstances unforeseen at the time of the notification, the principal shall, if the principal has deducted tax from the full amount of the payment at the rate specified on the related deduction authorisation, amend the line item concerned and declare the correct amount of the payment on the return to be made for the return period concerned.

(5)(a) Where a payment is made, in accordance with the terms of a valid deduction authorisation, in the return period following the return period during which that deduction authorisation was issued and before the making of the return by the principal in respect of the return period during which that deduction authorisation was issued, the principal shall ensure that this fact is reflected on that return.

• (b) The liability of a principal relating to payment under subparagraph (a) shall be a liability of the return period following the return period in which the deduction authorisation concerned was issued.

• (6) All line items on a deduction summary which are not cancelled under paragraph (3), or amended under paragraph (4), or to which paragraph (5) does not apply, shall form part of the return under section 530K(1) of the Act.

• (7) A principal shall not be entitled to—

• (a) cancel a line item under paragraph (3),

• (b) amend a line item under paragraph (4), or

• (c) take action under paragraph (5),

after the principal makes a return in respect of a relevant return period, or is deemed to have made such a return in accordance with section 530K(2) of the Act.

• (8) A principal shall declare the aggregate amount of all relevant payments to which section 530F(2) of the Act applies, but excluding any payments referred to in paragraph (4), on the return for the return period during which the payments were made.

• (9) Where a line item is cancelled under paragraph (3) or amended under paragraph (4), and where the relevant deduction authorisation indicated that tax was to be deducted from the relevant payment, the Revenue Commissioners shall, by electronic or other means, notify the relevant subcontractor of such cancellation or amendment.

Adjustment to liability

• (a) identify the subcontractor concerned in the manner required by the RCT service, and

• (b) provide such details in relation to the relevant payment as may be required by the RCT service.

• (2) The Revenue Commissioners shall cause the RCT service to notify a principal under section 530F(3)(b) of the Act of whether any adjustment arises as a result of the application of section 530F(3)(a) of the Act.

• (3) The rate of tax referred to in section 530F(3)(a) of the Act shall be the rate of tax last notified to the subcontractor concerned under section 530I of the Act before the submission of the details referred to in paragraph (1).

PART 6 MISCELLANEOUS

Partnerships, etc

• (2) On receipt of details referred to in paragraph (1), the Revenue Commissioners shall cause each member of the gang, group or partnership concerned to be notified in writing or by electronic means of the amount of income tax or corporation tax treated as having been paid by him or her under section 530P.

Records

• (a) the information and declaration required to be provided to the Revenue Commissioners under section 530B of the Act,

• (b) relevant payments which are required to be notified to the Revenue Commissioners under section 530C of the Act, including the tax deducted from each such payment,

• (c) registration details required by the Revenue Commissioners under section 530J of the Act,

• (d) the details included on a return made or required to be made under Chapter 2 of Part 18 of the Act,

• (e) the details required to be included on a return under Chapter 2 of Part 18 of the Act, and

• (f) tax due and payable under Chapter 2 of Part 18 of the Act.

• (2) Records required to be kept or retained by virtue of section 530S of the Act and paragraph (1) shall—

(a)(i) be kept in written form in an official language of the State, or

• (ii) subject to section 887(2) of the Act, be kept by means of any electronic, photographic or other process, and

• (b) be retained by the person required to keep the records—

• (i) for a period of 6 years after the completion of the transactions, acts or operations to which they relate, or

• (ii) in the case of a person who fails to comply with section 530K(1) of the Act, until the expiry of a period of 6 years from the end of the return period in which the relevant return has been delivered.

• (3) Where a principal, acting in accordance with any provision of Chapter 2 of Part 18 of the Act or these Regulations, creates or causes to be created any record, including records as defined in section 886 of the Act, the obligation of that principal to keep or retain that record, or cause that record to be kept or retained, shall exist notwithstanding the fact that a similar or identical record may be kept by the Revenue Commissioners.

Revocation

• (2) Notwithstanding the revocation in paragraph (1)—

• (a) a payment within the meaning of Regulation 2 of the Income Tax (Relevant Contracts Tax) Regulations ( S.I. No. 71 of 2000 ) made before 1 January 2012 shall be dealt with under those Regulations as if those Regulations had not been revoked under the Regulations of 2011, and

• (b) a relevant payment made between 1 January 2012 and the date of the coming into operation of these Regulations shall be dealt with under the Regulations of 2011 as if those Regulations had not been revoked.

GIVEN under my Hand,

24 December 2012.

NIALL CODY,

Revenue Commissioner.

EXPLANATORY NOTE.

(This is note is not part of the Instrument and does not purport to be a legal interpretation.)

The purpose of these Regulations is to reflect changes made to the legislation governing the operation of relevant contracts tax (RCT) as provided for under section 22 of Finance Act 2012. The Regulations replace the Income Tax and Corporation Tax (Relevant Contracts Tax) Regulations 2011 (S.I. 651 of 2011). The main change from those Regulations involves enhanced engagement with subcontractors in relation to the application of RCT to contracts and payments under those contracts.