EU sustainability
The EU has released an ‘omnibus’ package proposing two new directives which could lead to significant changes to corporate sustainability reporting.
Directive one, which is due to be passed by May this year, will result in deferring the Corporate Sustainability Reporting Directive (CSRD) by two years for wave 2 companies (large companies that are not publicly listed), which would otherwise have to report on sustainability for the first time this year. No change is proposed for wave 1 companies (very large quoted companies), which have been reporting on sustainability since 2024.
Directive two will take two years and if agreed by all 27 states, will lead to the thresholds that trigger reporting requirements for wave 2 companies being raised, taking around 80% of them out of CSRD’s scope altogether. If the directive is passed it is likely that there will also be fewer disclosures required and reduced due diligence for supply chains.
Large companies will get another two years to prepare for CSRD
Large companies will be barred from asking for more sustainability information from their suppliers than what is required to comply with the voluntary SME sustainability reporting standard (VSME). VSME compliance will be easily achievable and cost-effective for SMEs, many of which already provide sustainability information to their customers.
If the omnibus proposals are accepted by all 27 EU countries, not only will large companies get another two years to prepare for CSRD, but also some European Sustainability Reporting Standards (ESRS) disclosures will become optional instead of mandatory, and some assessments will be done every five years instead of every year. However, there are no proposals to change the ‘double materiality’ assessment and disclosure requirements.
With many Irish companies already reporting under IFRS Sustainability Disclosure Standards to a head office outside the EU, it may be the case that, say, a large pharma or bank subsidiary in Ireland that is in wave 2 for ESRS (ie reporting from 2027) will still have to report to its US headquarters under IFRS S1 and S2 this year.
Green bonds
Many investors are demanding that their pensions and other investments are invested in sustainable investment funds – so-called green funds. Recent Irish legislation implementing the EU requirements will ensure that investors are not misled by greenwashing by funds and that such funds make disclosures that are comparable across different funds.
Revenue updates
Revenue has updated its guidance on employer-provided vehicles and its agent e-linking process.
At a recent Tax Administration Liaison Committee meeting, it also confirmed that from the end of March 2025 final demand notices will be sent to agents.
A revised Form 11 will be issued by Revenue at the end of March fixing an issue with residential premises rental income relief.
And there has been Revenue confirmation that the uploading of draft financial statements will no longer be permitted.
Companies House
For members filing at Companies House in the UK, there are new authorised corporate service provider requirements.
Revisions to the law on tax appeals are under consideration
Crime report
The UK National Economic Crime Centre has issued its 2023/24 annual report. It includes case studies of money laundering in the UK which are of relevance to Ireland.
Upcoming bills
The government has issued its spring legislative programme 2025. Included is the Co-operative Societies Bill, which will place the co-operative model on a clearer and more favourable legal basis. There are also proposals in the Finance (Tax Appeals and Fiscal Responsibility) Bill to, among other matters, revise the law concerning appeals in matters of taxation.
The Registration of Short-Term Tourist Letting Bill will make it a requirement for short-term and holiday lets to register with Fáilte Ireland.
The Leaving Certificate accounting syllabus is out for consultation
Sponsored by the Department of Enterprise, the Industrial Development (Miscellaneous Provisions) Bill will allow IDA Ireland to establish jointly owned companies to develop industrial and commercial property and infrastructure. Meanwhile the Regulation of Artificial Intelligence Bill will lay down harmonised rules on AI.
The Dept of Housing, Local Government and Heritage is sponsoring a Building Standards Regulatory Authority Bill.
AI for SMEs
Accountancy Europe has prepared a fact sheet for small and medium-sized enterprises on the EU’s AI Act.
Leaving Certificate
The draft specification for the Leaving Certificate accounting syllabus has just been issued for public consultation. Digital technology, ethics and sustainability in accounting are cross-cutting themes, and three fundamentals are examined: the preparation and analysis of the financial statements of a sole trader, the preparation and analysis of the financial statements of a company, and informed decision-making.
New matters added to the syllabus for the first time include: an introduction to the taxation system and ROS; wages, wage deductions and CRO filing; and the use of digital accounting packages. Greater weight is to be given to decision-making and management accounting, with a reference that looks like a requirement for the use of a digital tool such as Excel to analyse data. There will be a two-part assessment: a written exam (60%) and an applied assessment (40%), with the latter using a ‘prescribed software package’. ACCA will be responding to the consultation, which closes on 28 April.
In Practice
Members with UK clients may be interested in subscribing to the In Practice e-zine from ACCA UK’s member services team, which includes useful UK tax and law updates as well as general practice matters.
