Aoife Lavan was inaugurated as the Institute’s 49th President at the AGM on 5 September. Aoife is a Private Client Tax and Pension Specialist with over two decades of experience in financial planning, pension management, and tax advisory services. She has recently set up her own pensions and retirement planning business, Black Oak Advisory which is based in Westport, Co Mayo.
Before taking up her role as President, Aoife spoke to Tax Talk host, Donal O’Donovan, about her career so far and her passionate interest in pensions. She outlined her priorities for the year ahead including simplification of the pensions’ landscape and listening to members. She said she would like to focus on wellness in the profession and the difficulties of combining family and other life responsibilities with full-time work, explaining how this had impacted her own career. Listen to Aoife’s interview on Soundcloud.
Irish Tax Institute President warns Revenue’s Enhanced Reporting Requirements are "counter-productive"
The new President of the Irish Tax Institute has described Revenue’s Enhanced Reporting Requirements (ERR) regime as “counter-productive”. The new rules require employers to report tax-free employee benefits in real-time, meaning on or before the time they are awarded to their staff.
Speaking at the Institute’s AGM, Aoife Lavan said there was no objection to providing the information being sought by Revenue. “But the stipulation that it be reported in real time places a significant burden on employers. And at a time when the cost of doing business is such a burning issue, it surely is counter-productive to push ahead with a regime that will increase compliance costs of small businesses.”
She added that the harsh penalty of €4,000 for any mistake made in the real-time reporting is likely to cause employers to abandon the practice of recognising employees through small benefits and gifts. “That, in my view, is a big price to pay when there is no loss to the Exchequer.”
The Irish Tax Institute raised its concerns about the new rules at its pre-Budget meeting with the Minster for Finance, Jack Chambers. “Let’s hope sense will prevail and that the Minister will accede to the changes we have recommended to the proposed system.”
Ms Lavan, who is a pensions’ specialist, is also hopeful that the Standard Fund Threshold for pensions will be raised in the forthcoming Budget. In its response to the Department of Finance’s public consultation on the threshold at the start of the year, the Institute made a strong case for raising the current €2 million cap which has remained unchanged for a decade.
“It’s easy to forget that it once stood at €5.4 million before being reduced to €2.3 million at the height of the financial crisis in December 2010. Four years later, it was further reduced to €2 million. But hopes are high that the forthcoming Budget will bring in a more realistic threshold that takes account of inflation and salary growth over the past ten years.”
Ms Lavan also raised concerns about the latest draft provisions of the legislation to introduce a participation exemption for foreign dividends which is to be published in the forthcoming Finance Bill.
“We are not happy with what we’ve seen because, as currently drafted, the provisions show no understanding of how the operations of multinationals are structured. They also rely on 1990s legislation and ignore all the recent corporate tax reforms which have been introduced in recent years to protect the Exchequer, including the anti-tax avoidance directives and the Pillar Two global minimum tax rate.”
Ms Lavan noted that all EU member states allow a dividend exemption for foreign source income and that the Institute has been calling for Ireland to follow suit for the last seven years. “Having been on the back foot for so long on the tax treatment of foreign source income of companies based here, it is critical that we get this legislation right. In the coming weeks, the Institute will do what it can to secure an outcome that puts Ireland on a level playing field with competitors in Europe and beyond.”
