Finance Act 2016 introduced an income tax exemption in respect of certain expenses of travel and subsistence of an Irish resident non-executive director of a company.

The expenses must be incurred solely for the purpose of attendance by a non-executive director, in his or her capacity as a director, at a “relevant meeting”.

The exemption applies to expenses incurred on or after 1 January 2017.

Payments to which the exemption applies may not exceed the Civil Service approved rates for mileage and subsistence as set down by the Minister for Public Expenditure and Reform. See details of the current Civil Service Rates for Travel and Subsistence.

Payments which come within the term of the exemption are also exempt from USC and PRSI.


Relevant director”, in relation to a company, means a person holding office as a non-executive director of that company –

  1. who is resident in the State, and
  2. whose annualised amount of emoluments from the office for the year of assessment 2017 and for each subsequent year in which the person is a director of the company does not exceed €5,000.

Relevant meeting” means a meeting in the State attended by a relevant director in his or her capacity as a director for the purposes of the conduct of the affairs of the company.

Travel” means travel by car, motorcycle, bus, rail or aircraft.

For more information please contact us.

With third level exams completed and State Examinations drawing to a close, Revenue has received a number of queries as to whether exam setters, invigilators and exam correctors can be engaged as “self-employed” individuals and paid gross or whether they should be engaged as “employees” with payments to them subject to deductions under the PAYE system.

In their recently published eBrief No. 48/17, Revenue have confirmed that whilst the facts of each case will determine whether an individual is self- employed or an employee, Revenue’s view is that exam setters, exam correctors and invigilators engaged by the State sector, private colleges or associations are, in general, likely to be employees and, therefore, deductions (tax, PRSI and USC) under the PAYE system should be made from the emoluments paid to them.

This is an important clarification for any educational establishment that engages individuals to set, invigilate or correct exams. It places responsibility for correctly deducting tax from payments to these individuals on the employer establishment and means that these individuals must be put on payroll even if they are engaged on an ad hoc basis or for a short period of time.

For more information please contact us.

A chargeable person is defined as a person who is chargeable to tax on that person’s own account or on another person’s account in respect of a chargeable period.

There is an exception to this definition in which some conditions must be met. It is these conditions that from today, 19 May 2017, Revenue have amended and the amendments as outlined below will be applicable from 2016 onwards.

The exception to a “chargeable person” definition is that an individual is not a chargeable person for a tax year where, for that year, they were in receipt of:

  • PAYE income only, or
  • PAYE income and non-PAYE income (rent or investment income…etc) where the total non-PAYE income assessable to tax-
    • does not exceed €5,000 (this was previously €3,174 for 2015 and previous years), and
    • is taken into account in determining the individual’s tax credits and standard rate cut-off point or is taxed at source under section 261 TCA 1997, i.e. deposit interest subject to D.I.R.T.

Revenue may take account of an individual’s gross income from non-PAYE sources in considering whether non-PAYE income should be taxed under the PAYE system.

In this regard, an individual whose gross non-PAYE income from all sources exceeds €30,000 (this was previously €50,000 for 2015 and previous years) is regarded as a chargeable person notwithstanding that his or her assessable income from non-PAYE sources does not exceed €5,000 (this was previously €3,174 for 2015 and previous years).

The exception to this rule is that this does not apply to directors of trading companies or to their jointly assessed spouses or civil partners.

In the case of married couples or civil partners who are jointly assessed, the income thresholds are applied to the joint non-PAYE income of both spouses or civil partners. In the case of married couples or civil partners who opt for separate assessment or single treatment, the thresholds are applied separately to each spouse or civil partner.

Note: An individual whose non-PAYE income (rent or investment income…etc) is nil due to an allowance which reduces his or her taxable profits to zero is a chargeable person, as nil profits cannot be taxed through the PAYE system.

For more information, please contact us.

The Knowledge Development Box (Certification of Inventions) Act has been enacted by the Oireachtas. This legislation will allow small and medium sized companies engaged in research and development activities to avail of the Knowledge Development Box.

The Finance Act 2015, introduced the Knowledge Development Box and this included a provision for small and medium sized companies to avail of the Knowledge Development Box with respect to unpatented inventions and avail of the effective rate of 6.25% in respect of qualifying profits. A small and medium sized company is defined as:

  1. A company with income from intellectual property (IP) not exceeding €7.5 million;
  2. A company with fewer than 250 employees;
  3. Turnover not in excess of €50m.

These limits also apply where the company in question is a member of a group.

This legislation will enable the Controller of Patents, Designs and Trade Marks (the “Controller of Patents”) to certify that an invention is novel, non-obvious and useful. The invention (IP) is not required to be protected by patent.

An application for the certification referred to as the “KDB Certification” must be accompanied by an opinion and supporting evidence from a patent agent confirming in their view the invention is novel, non-obvious and useful. A KDB certificate may only be issued in respect of one invention or group of inventions if the inventions are linked to form a single inventive concept.

The Act sets out four items in particular that would not be regarded as meeting these criteria:

  1. A discovery, scientific theory or mathematical method;
  2. An aesthetic creation;
  3. A scheme, rule or method for performing a mental act, playing a computer game or doing business, or a program for a computer;
  4. The presentation of information.

As the IP is not protected by patent, the Controller of Patents is required to keep all applications, KDB certificates and refusals to issue KDB certificates confidential. Therefore, companies can be assured that details of their invention disclosed in a KDB certificate application should be kept confidential.

The Act also makes some amendments to the Patents Act 1992, to allow for the controller of patents to grant patents following a substantial examination for novelty. Thus, ensuring that Irish patents will fall within paragraph (a) of the definition of “Qualifying Patent” in section 769G of the Taxes Consolidation Act 1997.

For further information on the above article or any other issue surrounding the Knowledge Development Box, please contact us.

Tax relief at 20% has now been made available by the Revenue Commissioners in respect of Assistance Dogs which are supplied and trained by an organisation accredited by Assistance Dogs Europe (ADEu). Assistance Dogs Europe (ADEu) are the European chapter of Assistance Dogs International (ADI), a worldwide coalition of non-profit programmes that train and place Assistance Dogs. The tax relief may be claimed in the following two situations:

Blind Person’s Guide Dog

Where a blind person maintains a trained guide dog, supplied by an organisation accredited by the Irish Guide Dog Association, an agreed sum of €825 may be claimed as a health expense by that person (i.e. total tax credit of €165).

For an individual to be eligible to claim this relief they must be entitled to the Blind Person’s Tax Credit and provide written confirmation from the Irish Guide Dogs Association that he/she is the registered owner of a trained dog.

A letter from the organisation which supplied the dogs confirming that the claimant is the registered owner of a guide dog should be submitted with the first claim and the relief will be granted for each year thereafter during which the person maintains the dog.

Assistance Dogs for Disabled Individuals including Children with Autism

If a person maintains a trained Assistance Dog, a sum of €825 may be claimed as a health expense by that person (i.e. total tax credit of €165).

To qualify for this relief an individual must prove that he/ she maintains a trained dog which has been supplied by an organisation accredited by the Assistance Dogs Europe. A statement from the organisation which supplied the dog will be sufficient for the first claim and the relief may be granted each year thereafter during which the individual maintains the dog.

Assistance dogs are trained to meet specific needs of their owner which can include the following:

  • Help their owner stand and walk by providing a stable base and forward motion
  • Provide warning of an approaching seizure or a fall in blood sugar levels, to allow the owner to take preventive action
  • Alert a deaf owner to a variety of sounds
  • Help a person dress/undress
  • Bark to raise the alarm in an emergency e.g. in the case of a fall/seizure
  • Retrieve items such as telephone/keys/a bag
  • Help the person/child to get out and about more easily and have a calming effect, especially for children
  • Detect danger or certain medical symptoms that the person may develop and give warning

For more information on the new tax relief available for Assistance Dogs, please contact Siobhán O’Hea, Partner in our Tax Services.