Aidan Clifford, ACCA Ireland advisory services manager

Tax havens list scrutinised

MEPs adopted a resolution pushing for changes to the system used to draw up the EU list of tax havens, as it is currently ‘confusing and ineffective’ and is reported to be ‘covering less than 2% of worldwide tax revenue losses’. The resolution is calling for ‘the process of listing or delisting a country more transparent, consistent and impartial’.

Guernsey, the Bahamas and the Cayman Islands were recently removed from the list, the latter while reported to be running a 0% tax rate policy. Among other measures, the resolution says that all jurisdictions with a 0% corporate tax rate or with no taxes on companies’ profits should be automatically placed on the blacklist. There is a call for the process of establishing the list to be formalised through a legally binding instrument by the end of 2021.

The resolution states that EU member states should not be immune from scrutiny. The text points out that according to the Corporate Tax Haven Index 2019, the top-ranked jurisdictions are: the British Virgin Islands, Bermuda, the Cayman Islands, the Netherlands, Switzerland, Luxembourg,  Jersey, Singapore, the Bahamas, Hong Kong and Ireland.

CRO extends deadline

Due to the current Level 5 restrictions and the challenges of adjusting to a new IT system, Companies Registration Office (CRO) has extended the current filing arrangements for companies with an annual return date of 30 September or later until 28 May. All companies with an extension to file due to delayed AGMs will also have a further extension to file until 28 May.

Our analysis suggests that the most common issue accountants experience with the companies online registration environment (CORE) system is the belief that this must be done in two steps, first with the accounts and then with the signing page.  Here is a suggested one-step process for CRO filing for audit-exempt companies only:

Email the completed accounts to the client or otherwise get initial approval that they are happy with the accounts.

Begin the annual return process by uploading these accounts to CORE and getting the signature page.

Send the signature page, financial statements, abridged accounts, CT computations etc to the client for signing.

When the client returns everything signed, complete the filing process

If the client is unable to sign or approve the accounts for whatever reason, abandon the CORE saved file, delete the application and start again at point 1.

The legality of the one-step process relates to Section 324 of the Companies Act 2014, which has a requirement that ‘Every copy of every balance sheet which is laid before the members in general meeting or which is otherwise circulated, published or issued shall state the names of the persons who signed the balance sheet on behalf of the board of directors’.

It does not look like uploading a set of financial statements would meet the definition of ‘otherwise circulated, published or issued’. The upload is not publicly visible and it is also not ‘issued’.

That section also states that ‘If any copy of a balance sheet is… delivered to the Registrar without the balance sheet (the original of it as distinct from the copy) having been signed as required by this section or without the required statement of the signatory’s name on the copy being included, the company and any officer of it who is in default shall be guilty of a category 2 offence’.

It does not look like uploading a set of financial statements would meet the definition of ‘delivered’ as the ‘delivery’ is made when the accounts are submitted, which happens at the end of the process and after a fee is paid. Effectively, the accounts have been put in an envelope and addressed but not yet posted.

Note also that the CRO system will not let you ‘go back’ in the process. If an issue arises and the financial statement has to be replaced, then the filing needs to be abandoned and started again with the revised financial statements.

Section 332 and 337 have similar requirements in respect of the directors’ reports and auditors report. However, there is an issue with the signing of the audit report where 337(5) requires that the audit report be dated and signed when filed.

An audit report should not be dated and signed prior to the directors’ report and financial statements being signed by the directors. So it would be problematic to have uploaded the financial statements with an audit report attached when you do not know what date that audit report will be signed.

ESEF filing postponed

The Department of Finance has advised that it will postpone the requirement to file European Single Electronic Format (ESEF) financial statements to financial years beginning on or after 1 January 2021 (previously 2020).

ESEF is for companies that have securities listed on an EU-regulated market and was designed to ensure that annual reporting takes place in a single, structured, electronic format so that the financial statements are machine-readable.

The Central Bank of Ireland has said that it will continue to accept annual financial reports from Irish issuers subject to the Transparency Regulations and ESEF Regulation in PDF format for financial years beginning between 1 January 2020 and 31 December 2020. However, companies may adopt ESEF earlier if they choose.

No more licence leeway

The Property Services Regulatory Authority (PSRA) has said that, with effect from 22 February, it will be strictly implementing the six-week deadline for all licence renewals, having previously allowed some leeway during the early days of the Covid-19 outbreak.

All renewal applications with a deadline date of 22 February and onwards must ensure that their application is submitted via on or before the deadline date set out in the renewal. Non-compliance will result in the licence expiring on its expiry date.

PSRA has said that although a submission setting out exceptional circumstances will be considered, the unavailability of documentation, such as the accountant’s report, at time of renewal submission will not be considered as an exceptional circumstance.