ACCOUNTING STANDARDS AND TAXATION

A.

Accounting Standards

European Union
IFRS adoption
European Union
economic and political
partnership between 28
European countries that
cover much of Europe
Continent
European Financial
Reporting Advisory Group
(EFRAG)
advisory body that takes
part in the European
endorsement process of
IFRS

2002
European Union adopted
IFRS as the required
financial reporting
standards for the
consolidated financial
statements of all

Ireland
IFRS adoption
FRS 100 Application of Financial
Reporting Requirements
FRS 101 Reduced Disclosure
Framework
FRS 102 The Financial Reporting
Standard applicable in the UK and
Republic of Ireland
(effectivity: 1/1/2015)
However, all other entities,
including subsidiaries of listed
groups and parents preparing their
separate financial statements,
should consider the options
available to them:
1. Full EU-adopted IFRSs;
2. FRS 101 EU-adopted IFRSs
with reduced disclosures for
qualifying entities;
3. FRS 102 the replacement
for Irish GAAP, with
disclosure exemptions

United Kingdom
IFRS adoption
NEW UK GAAP
For periods beginning
on or after 1 January
2015, three new Financial
Reporting Standards (FRS
100, 101 and 102) will be
in force, bringing with
them a number of new
options for all UK entities
and groups.

FRS 100 Application of

financial reporting
requirements
sets out the applicable
financial reporting
framework for entities
preparing financial

European companies
whose debt or equity
securities trade in a
regulated market in
Europe, effective in 2005.

Modifications were made in

IFRS adopted by the EU:
1. Option to fair value all
financial assets and
liabilities in IAS 39
Financial Instruments:
Recognition and
Measurement
2. Fair value hedge
accounting for portfolio
hedge of interest rate risk
in IAS 39
3. The effective dates of the
following new /modified
standards were deferred
to 1 January 2014
a. IFRS 10 Consolidated
FS
b. IFRS 11 Joint

available for qualifying

entities; or
4. FRSSE still available for
small companies within
scope.

Change from Existing IRISH

GAAP
1. Financial Instruments
Complex financial
instruments will now come
on BS and be measured at
FVPL.
2. Goodwill and Intangibles
must have finite lives under
FRS 102 and must be
amortized
3. Group pension schemes
For groups that operate
defined benefit pension
schemes the multi-employer
exemption that enables all
the individual group entities
to use defined contribution
accounting in their separate

statements in accordance
with legislation,
regulations or accounting
standards applicable in
the United Kingdom and
Republic of Ireland
FRS 101 Reduced Disclosure
Framework
enabling most subsidiaries
and parents to use the
recognition and
measurement bases of
IFRSs in their individual
entity financial
statements, while being
exempt from a number of
disclosures required by
full IFRSs
FRS 102 The Financial
Reporting Standard
Applicable in the UK and
Republic of Ireland.
Derived from the IFRS for
SMEs, the Financial
Reporting Council has
made significant
modifications to address

Arrangements
c. IFRS 12 Disclosures of
Interest
in other
entities
d. IFRS 27 Separate FS
e. IFRS 28 Investment in
Associates

TAXATION

financial statements, with no

obligation appearing on their
individual balance sheets,
will disappear.

company law
requirements and
incorporate additional
accounting options.
FRS 103 Insurance
Contracts.
accounting requirements
for entities with insurance
contracts
FRS 104 Interim Financial
Reporting.
use in the preparation of
interim financial reports
for those entities that
apply FRS 102
FRS 105 The Financial
Reporting Standard
applicable to the Microentities Regime.
satisfy the legal
requirements applicable to
micro-entities and to
reflect the simpler nature
and smaller size of microentities

EUROPEAN UNION
Not have direct role in
raising taxes or setting tax
rates

EUs ROLE
Oversee national tax rules
to ensure they are
consistent in EU policies
a. Promoting economic
growth and job creation
b. Ensuring free flow of
goods, services and
capital around EU

Decision on tax matters

require unanimous
agreement by all EU
governments

amount of tax paid is

decided by your
Government, not EU

IRELAND
Corporate Taxation

UNITED KINGDOM
Corporate Taxation

Basis
Basis
Resident - worldwide profits
Resident - worldwide profits
and gains, with credit given
Non-resident - only Irish
for overseas taxes paid

Non-resident - only UK
source income
source profits
Taxable income
Company's profits (Business Taxable income
trading income, several
income, passive income and
baskets of non-trading
capital gains)
Normal business expenses
income and capital gains
may be deducted
Rates
Rate
20% starting April 1, 2015;
12.5% - trading income
proposed 19% in 2017 and
25% - non-trading income
18% in 2020
Dividends
PERSONAL TAXATION
Received by an Irish
resident company from
Basis
another Irish company Resident - worldwide profits and
Exempt
gains
Capital gains
Non-resident - UK profits, not be
taxed at 33% and 40%
taxed for capital gains even if
Gains on sale of substantial asset is located in UK
shareholdings in companies

in EU member states or tax

treaty country -EXEMPT if
certain conditions are
satisfied

Rate
Progressive rates - 0% - 45%

VAT and Excise duties

Losses
COMPLIANCE
FILING
EU nations align their rules
may be carried back to the
and minimum rates.
immediately preceding
Corporation
period of equal length or
Corporate and Individual Tax
self-assessment regime
carried forward indefinitely
EU ensure that principles
online filing is mandatory
are followed
for all company tax returns
Foreign tax credit
Individual
may be credited against
Tax Revenue
Tax year - April 6 to
Irish tax on the same profits
EU has no say on how
credit is limited to amount
following April 5
countries spend their tax
withheld by employer
of Irish tax payable on the
revenues
under PAYE system and
foreign income
To minimize risk on
remitted to tax authorities
overspending and going on

not subject to PAYE, and

Withholding Tax
too much debt:
capital gains tax is selfDividends
EU countries
assessed
paid to another Irish
coordinate their
company -EXEMPT
economic policies
Tax treaties and authorities
paid to a non-resident
a. National tax
125 tax treaties
company or individual policies
HM revenue and customs
20%, unless reduced under
b. Seeking to make
tax treaty
them fairer
c. More efficient and
Interest

more growth
friendly
Breaking down Tax Barriers
treaties placed between
most EU countries to
eliminate double taxation

Standardized taxation of
goods and Services
single market allows goods
and services to be traded
freely across borders within
the EU
Minimum tax rates are in
place for VAT and excise
duties
Working on EU VAT
system, to make it simpler,
more fraud-proof and
efficient in the revenues it
delivers to national

non-resident - 20%, unless

reduced under tax treaty

Royalties
Generally - tax exempt
patent royalties - 20%

PERSONAL TAXATION
Basis
Resident - worldwide
income and gains
Non-resident - Irish source
income and gains
Filing status
Married couples and civil
partners may opt for a joint
or separate assessment
Taxable income
Schedular system
Income in form of
Dividends -20%
Capital gains - 33%
Rates
progressive rates up to 40%

governments
Fair taxation across borders
tax laws of one country
should not allow people to
escape taxation in another
.
COMPLIANCE
FILING
Corporation
Self-assessed regime
Individual
withheld by the employer
under the PAYE(Pay-as-you
earn) system and remitted
to tax authorities
Income not subject to PAYE;
Self-assessed.

IRELAND
Tax treaties and Tax
authorities
72 tax treaties
Tax authority - Office of the
Revenue Commissioner