COVID-19 and Corporation Tax

As part of its advice and guidance for taxpayers dealing with a range of difficulties caused by the impacts of the COVID-19 virus, Revenue have updated their guidance regarding the presence of individuals in, or outside, Ireland, for Corporation Tax purposes.

Revenue have stated that where an individual is present in Ireland, and that presence is shown to result from travel restrictions related to COVID-19, they will be prepared to disregard such presence in Ireland for Corporation Tax purposes for the employer company.

Similarly, if an individual is present in another jurisdiction as a result of COVID-19 related travel restrictions, and would otherwise have been present in Ireland, Revenue will be prepared to disregard such presence outside Ireland for Corporation Tax purposes.

In both cases, the individual and company should maintain a record of the facts and circumstances of the bona fide relevant presence in or outside of Ireland for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.

In November 2021, Revenue confirmed that this treatment would remain valid until 31 December 2021, at which time it would be withdrawn. However, in late December 2021 Revenue confirmed that the concessional treatment was to remain in place until 31 January 2022, with the position kept under review to determine if any further extension will be required.

We now understand that Revenue have reviewed the position and it has been decided that, in light of the announcement on 21 January 2022 of the lifting of most restrictions, this concession will not be extended any further and will accordingly expire on 31 January 2022.

While this position may be understandable in the context of the lifting of Covid-related restrictions in Ireland, there may be restrictions applicable in other jurisdictions that may impact on an individual’s ability to travel to and/or from Ireland.

In light of the expiration of the concession, companies should consider the impact of any remote attendance of directors at board meetings, or remote working of employees, and the impact this may have on the tax residence of the company, or the creation of a permanent establishment in another jurisdiction.

BDO Ireland is here to support you and your business through these unprecedented times. For any questions or assistance please contact your usual BDO tax contact or a member of our Tax team. 

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