Diploma in Tax Volume 2

MODULES 4 & 5: Business Tax: Corporation Tax & Accounting for Tax

Chapter 1 Introduction to Business Taxes

1.1 Identify what taxes a company is subject to

1.2 Outline the main sources of law for each of these taxes

Chapter 2 Introduction to Corporation Tax

2.1 Contrast income tax with corporation tax

2.2 Explain terms used when calculating corporation tax

2.3 Apply income tax principles to allocate the income of corporates to the appropriate Schedule or Case

2.4 Apply capital gains tax principles to the taxation of corporate capital gains

2.5 Explain the application of the appropriate corporation tax rate to income from each source

Chapter 3 Application of Income Tax Principles to the Taxation of Companies

3.1 Compare the rules that apply to deductions allowable in arriving at taxable income for corporation tax and those allowable for income tax purposes

3.2 Identify the disclosure notes and other sources that are relevant to the preparation of the corporation tax computation

3.3 Identify the disclosure notes that are relevant to other taxes

3.4 Calculate the taxable profits of an Irish corporate taxpayer

Chapter 4 Interest

4.1 Outline the ways in which interest paid by a company can be deductible for corporation tax, including interest as a charge

4.2 Outline when interest is treated as a distribution and the elections available

Chapter 5 Other Charges on Income

5.1 Explain what is meant by “a charge on income” and identify when it arises

5.2 Conclude what is meant by an annual payment and when it arises

5.3 Conclude what relief is available for charges on income

Chapter 6 Relief for Losses

6.1 Interpret the rules for trading loss relief and explain how they apply to a set of facts

6.2 Conclude on the use of trade charges to create or augment a trading loss

6.3 Compare the loss relief available to an Irish company for its Irish trade to that available for foreign trades

6.4 Conclude on the relief available for rental losses

6.5 Calculate the taxable profits for Irish and foreign properties after claiming loss relief

6.6 Assess the special loss relief rules relating to other sources of income

6.7 Apply all loss reliefs and restrictions in the correct order and identify any relief to be carried forward

Chapter 7 Corporation Tax Groups

7.1 Define a group/consortium for corporation tax purposes

7.2 Identify and apply any group reliefs available for corporation tax purposes

7.3 Explain the interaction of group relief with other reliefs

7.4 Describe and apply the reliefs in various situations

7.5 Identify Capital Gains Groups and apply group relief

Chapter 8 Disposals of Business Assets and Investments

8.1 Apply the rules of CGT to gains of a company when disposing of a business asset or investment

Chapter 9 Distributions

9.1 Define a “distribution” for tax purposes

9.2 Outline how dividend withholding tax applies to a distribution

9.3 List the exemptions from dividend withholding tax and associated administrative requirements and apply these in practical situations

9.4 Assess the income tax or CGT implications of distributions in specie

9.5 Outline the tax implications of scrip dividends

Chapter 10 Close Companies

10.1 Explain the reason behind close company rules

10.2 Outline the meaning of terms specifically related to the close company rules

10.3 Outline which companies are specifically excluded from being close companies

10.4 Judge whether a company is a close company or not

10.5 Detail the issues surrounding the provision of benefits to participators and associates

10.6 Detail the issues surrounding interest paid to directors and directors’ associates

10.7 Detail the issues surrounding the transfer of assets at an undervalue

10.8 Detail the issues surrounding loans to participators

10.9 Calculate the surcharge on undistributed investment and estate income

10.10 Calculate the surcharge on service companies

Chapter 11 Share Buy-Backs

11.1 Explain and apply the taxation implications of a company buying its own shares

11.2 Describe and apply any relief available on share buy-backs

Chapter 12 Accounting for Tax Charges and Provisions

12.1 Outline the requirements for accounting for current tax in the Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position

12.2 Outline the requirements of International Financial Reporting Interpretations Committee (IFRIC) 23 Uncertainty over Income Tax Treatments

12.3 Explain the purpose of a tax account and the main differences between the account balance and the tax payment

12.4 Calculate the current tax expense (or income) for the Statement of Profit or Loss and Other Comprehensive Income

12.5 Calculate the impact on the tax account of payments of corporation tax and of tax withheld on income and expenses

12.6 Calculate the accounting adjustments required for adjustment of prior year tax liabilities on submission of tax returns and on settlement of Revenue audits

12.7 Calculate the current tax provision for the Statement of Financial Position

12.8 Outline the requirements for accounting for deferred tax in the Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position

Chapter 13 Supporting the Financial Accounting and Audit Teams in Reporting Tax Charges and Provisions in the Reporting Cycle

13.1 Set out the requirements of the accounting standards (under FRS 102 and IFRS) relevant to the reporting of deferred tax

13.2 Reconcile the current expected tax charge with the current tax expense or income

13.3 Set out the main differences between Financial Statements prepared under FRS 102 and under IFRS, and identify what entities are most likely to report under FRS 102 and which under IFRS

13.4 Outline the tax issues that arise when Financial Statements are subsequently amended (IFRS and FRS 102)

Chapter 14 Financial Audit

14.1 An awareness of the other services provided by auditors

14.2 Outline and apply how tax balances are audited for the purposes of the audit report in Irish financial statements and how the audit work is evidenced

14.3 Outline and apply when audit adjustments are required in tax balances for financial statements

14.4 An awareness of how uncertain tax positions arise in Irish financial statements and the appropriate provisioning

Chapter 15 Administration of Corporation Tax

15.1 Describe the self assessment system as it applies to companies

15.2 Outline a company’s obligations under the pay and file system

15.3 Outline what reliefs can be denied to companies who fail to meet their pay and file obligations

15.4 Describe when an error or mistake claim may be made and the reasons for so doing

15.5 Describe when an expression of doubt may be made and the benefits of so doing

15.6 Explain company secretaries’ liability to pay certain penalties

15.7 Assess the pay and file obligations of a company and prepare a corporate tax return

15.8 Understand the mandatory requirement to file accounts and computations in iXBRL format

MODULE 6: VAT

Chapter 1 Introduction to Indirect Taxes

1.1 Explain the differences between direct and indirect taxes

1.2 Set out the different rates of VAT

1.3 Set out general transactions

Chapter 2 VAT in Ireland

2.1 Describe how VAT is a tax on transactions rather than a tax on people or income

2.2 Outline how the collection of tax is effected by a chain of transactions

2.3 Outline some basic rules and concepts of VAT

Chapter 3 Irish VAT in the EU Context

3.1 Outline the European dimension to Irish VAT

3.2 Explain the mission of the CJEU

3.3 Describe the ways in which a case can come before the CJEU

3.4 Identify the key sources of VAT law applicable to Irish VAT

Chapter 4 Charge to VAT

4.1 Identify the different rates of VAT in Ireland and the scope of VAT

4.2 Outline the four requirements for a supply to be chargeable to Irish VAT

4.3 Define the term “business” for VAT purposes, including any necessary sub-definitions

4.4 Outline the specific exclusions from being “in business” for VAT purposes

4.5 Define the term “accountable person” and outline the legislative list of accountable persons

4.6 Outline when the receipt (not the supply) of goods/services can make a person an accountable person

4.7 Outline the implications of being an accountable person

4.8 Outline who is required to register for VAT and set out when a trader may wish to elect to register for VAT or cancel an election

4.9 Describe the anti-fragmentation rule

4.10 Explain what is meant by a VAT exempt activity

4.11 Identify whether an activity is an exempt activity

4.12 Distinguish between “VAT exempt” and “zero-rated” and explain why the concept of VAT exempt activities exists

4.13 Explain how a person can engage in both VATable and VAT exempt activities and assess the taxable status of a person making different supplies

Chapter 5 Supply of Goods

5.1 Define what is meant by a “good”

5.2 Define what is meant by the “supply of goods”

5.3 Outline the VAT registration thresholds for the supply of goods

5.4 Describe what is meant by a self-supply

5.5 Explain the effect of a self-supply

5.6 Outline transactions that are deemed not to be a supply of goods

5.7 Describe the implication of a transaction being deemed a non-supply

5.8 Define a gift for VAT purposes and outline the VAT treatment of gifts

5.9 Explain any relief available for small business gifts

5.10 Explain any relief available for other gifts, such as advertising goods

5.11 Explain the VAT treatment of gifts to oneself

5.12 Analyse a set of circumstances and identify what supplies have taken place and the VAT applicable

Chapter 6 Cross Border Supplies (Goods)

6.1 Outline the place of supply rules for the supply of goods

6.2 Outline the distance selling rules in relation to goods

6.3 Outline the treatment of goods dispatched to persons in other EU Member States

6.4 Differentiate between intra-Community dispatches to persons registered for VAT in other EU Member States and those not registered for VAT

6.5 Outline the treatment of goods acquired from persons in other EU Member States

6.6 Explain how the acquisition of a new means of transport is treated differently to other intra-Community acquisitions

6.7 Outline how intra-Community acquisitions of goods can affect unregistered businesses

6.8 Outline what is meant by triangulation and explain why the relief is necessary

6.9 Describe when triangulation relief is available and outline how the relief is claimed

6.10 Analyse a set of circumstances and identify what supplies have taken place and the VAT applicable

6.11 What is the difference between imports/exports and intra-Community acquisitions/dispatches?

6.12 Outline the general place of supply rules relating to the export of goods

6.13 Outline the treatment of transportation services in respect of the export of goods outside the EU

6.14 Outline any documentation requirements associated with the export of goods

6.15 Outline the general place of supply rules relating to the import of goods

6.16 Outline the treatment of transportation services in respect of the import of goods

6.17 Outline any documentation requirements associated with the import of goods

Chapter 7 Supply of Services

7.1 Define what is meant by the supply of services

7.2 Outline the VAT registration thresholds for the supply of services

7.3 Apply the self-supply rules in relation to services

7.4 Compare the self-supply rules that apply to goods and services

7.5 Analyse a set of circumstances and identify what supplies have taken place and the VAT applicable

Chapter 8 Cross Border Supplies (Services)

8.1 Outline the general place of supply rules for the supply of services

8.2 Outline the main exceptions to the general place of supply rule

8.3 Describe the VAT treatment of services connected with immovable goods located in Ireland

8.4 Describe the VAT treatment of services connected with immovable goods located outside Ireland

8.5 Explain how the VAT treatment of cross border supplies is affected when an agent is involved

8.6 Explain what is meant by “use and enjoyment” provisions and explain why these provisions were introduced

8.7 Outline the current “use and enjoy” provisions

8.8 Analyse a set of circumstances and identify what supplies have taken place and the VAT applicable

Chapter 9 Agents

9.1 Outline what is meant by an “agent”

9.2 Compare the treatment of supplies made by a disclosed agent and an undisclosed agent

9.3 Compare the treatment of supplies of goods and supplies of services made to agents

Chapter 10 Amount Chargeable to VAT

10.1 State the general rule for the amount chargeable to VAT

10.2 Explain how expenses incurred and re-charged on invoices are treated for VAT purposes

10.3 Explain the VAT treatment of certain items and transactions and calculate the amount chargeable to VAT

10.4 Analyse a set of circumstances and identify what supplies have taken place and the VAT applicable

10.5 Explain the interaction of excises and VAT in determining the amount chargeable to VAT

Chapter 11 Consideration

11.1 Explain the VAT treatment of non-monetary consideration

11.2 Explain when the open market value is imposed instead of the actual consideration

11.3 Explain the VAT treatment of excess consideration received by a supplier

11.4 Analyse a set of circumstances and identify what supplies have taken place and the VAT treatment applicable

Chapter 12 Rates of VAT

12.1 Define “composite” supplies

12.2 Define “multiple” supplies

12.3 Outline what is meant by the “two-thirds rule”

12.4 State how the VAT due on these supplies is calculated, incorporating any simplification measures

12.5 “Goods made up”

12.6 Describe the VAT treatment of certain supplies of goods

Chapter 13 Administration Arising from Cross-Border Supplies

13.1 Describe INTRASTAT returns

13.2 Describe VIES statements

13.3 Describe how Irish VAT may be recovered by foreign traders and how foreign EU VAT may be recovered by Irish traders

13.4 Outline any reliefs that are available to Irish persons principally involved in cross-border supplies (Section 56 Authorisation)

13.5 Outline any reliefs that are available to non-Irish traders (VAT 60A Procedure)

13.6 Compare the Section 56 VATCA 2010 relief and the VAT 60A relief

Chapter 14 Deductible and Non-Deductible VAT

14.1 Outline the general rule on the deductibility of VAT

14.2 List the categories of costs on which an input VAT credit generally is available

14.3 List the categories of costs on which an input VAT credit generally is not available

14.4 Define “qualifying activities” within the EU for VAT purposes and explain their relevance to the recovery of VAT paid

14.5 Define other “qualifying activities” including non-EU supplies for VAT purposes and explain their relevance to the recovery of VAT paid

14.6 Analyse a set of circumstances and calculate the VAT deduction available

14.7 Explain why input VAT recovery is prohibited in relation to exempt and non-taxable activities

14.8 Explain when the apportionment of VAT is necessary

14.9 Explain how VAT apportionment is made

14.10 Calculate the input VAT credit when apportionment is necessary

Chapter 15 Administrative Aspects of VAT

15.1 Define a ‘taxable period’ for VAT purposes

15.2 Describe the different VAT returns and when each is applicable

15.3 Outline when the different VAT returns must be filed

15.4 Outline how to complete a VAT3 return

15.5 Outline the penalties that apply in the case of non-compliance with filing requirements

15.6 Outline the options available to Revenue when a person under-declares their VAT or over-claims a refund

15.7 Outline the options available to Revenue when a person fails to register for VAT or fails to file a return

15.8 Outline the requirements of a valid VAT invoice

15.9 Explain how the requirements are met by Electronic invoicing

15.10 Outline the time limits for issuing invoices

15.11 Outline the requirements of a valid credit note

15.12 Outline the requirements of a valid debit note

15.13 Outline the penalties that apply in the case of non-compliance in relation to invoices

15.14 Describe the taxpayer’s obligation to keep records

15.15 Outline Revenue’s obligations in relation to VAT registrations

15.16 Outline the taxpayer’s obligations and choices in relation to VAT registration

15.17 Outline how a taxpayer registers for VAT

15.18 Schemes for Accounting for VAT

Chapter 16 VAT on Property

16.1 Outline the different rights a person can hold over or in property

16.2 Judge whether a contract is a license or a lease and explain the VAT and legal implications of the judgement

16.3 Describe how property transactions were treated under the old system (pre 1 July 2008)

16.4 Describe how property transactions are treated (post 1 July 2008)

16.5 Explain the VAT treatment where a property developer leases a residential property prior to its supply

16.6 Explain the capital goods scheme (CGS)

16.7 Outline how the transfer of business relief can apply to the transfer of Property

Chapter 17 Overpaid VAT

17.1 Outline when a taxpayer is entitled to a repayment of VAT

17.2 State the time limits for VAT repayments

17.3 Define “Mistaken assumption”

17.4 State when a taxpayer is entitled to statutory interest on the repayment of VAT

Chapter 18 Relevant Contracts Tax

18.1 Understand how withholding tax applies on payments to subcontractors, apply withholding tax, calculate the credit available and explain the e-RCT compliance system

Glossary of VAT Terms

MODULE 7: Capital Acquisitions Tax & Stamp Duty

Chapter 1 Introduction to Capital Acquisitions Tax

1.1 Identify gifts and inheritances which are taxable under CAT

1.2 Outline the key aspects of a CAT computation

1.3 Explain and identify the different types of ownership interests which exist

1.4 Outline the tax rates applicable to CAT

1.5 Compare and contrast CAT with CGT and income tax

Chapter 2 Residence, Ordinary Residence and Domicile

2.1 Outline the impact that residence and domicile have on a person’s liability to CAT

Chapter 3 Arriving at the Taxable Value

3.1 Summarise how to calculate the taxable value of a gift or inheritance

3.2 Determine the incumbrance free value of a benefit for CAT purposes

3.3 Judge whether a deduction is allowable or non-allowable for CAT purposes

3.4 Compute the taxable value of a gift or inheritance

Chapter 4 Calculating the Tax

4.1 Outline how aggregation applies, using illustrative examples

4.2 Outline how to determine the rate of CAT applicable

4.3 Explain how a credit for CGT paid on the same event is granted

4.4 Explain the taxation of same day benefits

4.5 Describe how the benefit of freedom from tax is subject to CAT

4.6 Ascertain the valuation date for gifts or inheritances

4.7 Contrast the valuation date of gifts and inheritances with the date a gift or inheritance is deemed to be taken and explain the significance of each

4.8 Explain how dispositions to and by a company are treated for CAT

Chapter 5 The Taxation of Married Couples and Civil Partners

5.1 Outline any reliefs available on the transfer of assets between spouses and civil partners

5.2 Compare how transfers between separated and divorced couples and transfers following the dissolution of a civil partnership are treated for CAT purposes

5.3 Outline how transfers to a surviving spouse/civil partner on death are treated

Chapter 6 Exemptions

6.1 Identify if a gift or inheritance is exempt from CAT

6.2 Identify if a donee/successor is exempt from CAT

Chapter 7 The Succession Act 1965

7.1 Outline the main terms of the Succession Act 1965

Chapter 8 Double Taxation Relief

8.1 Describe how double taxation relief is granted in Ireland for tax suffered on a gift or an inheritance in other jurisdictions

Chapter 9 Family Businesses, Including Farms

9.1 Identify if any relief is available on a disposition involving land

9.2 Outline any clawback provisions applicable to agricultural relief

9.3 Identify if any relief is available on a disposition involving a business

9.4 Outline any clawback provisions applicable to business relief

9.5 Compare agricultural and business relief

9.6 Describe the relief available for “favourite nephews”

9.7 Outline the conditions which must be met in order to qualify for “Favourite Nephew” relief

Chapter 10 Administration of CAT

10.1 Identify who the accountable persons are for CAT

10.2 Outline the self assessment system for the collection of tax and complete the returns for individuals to manage their filing obligation and manage their compliance calendar

10.3 Describe and compute the consequences of failing to file a return or pay a tax liability in full and on time

Chapter 11 Introduction to Stamp Duty

11.1 Identify the events that give rise to stamp duty

11.2 Identify the heads of charge for stamp duty

11.3 Outline the territorial scope of stamp duty

11.4 Explain the meaning of terms used in the context of stamp duty

11.5 Outline the rates of stamp duty

Chapter 12 The Charge to Stamp Duty - Sales

12.1 Assess whether a transaction is a sale and judge whether there is a stampable document for the sale

12.2 Identify whether the document is within the charge to stamp duty

Chapter 13 The Rate of Stamp Duty

13.1 Identify the correct rate of stamp duty that applies to a sale of non-residential property

13.2 Identify the correct rate of stamp duty that applies to a lease and to a sale of shares

13.3 Understand the interaction of stamp duty and VAT

13.4 Understand the extent of double taxation relief for stamp duty

Chapter 14 Valuation

14.1 Assess where market value is imposed for stamp duty

14.2 Identify the amount on which stamp duty is chargeable

Chapter 15 Real Property

15.1 Calculate stamp duty on a transfer of residential property

15.2 Describe the stamp duty treatment when a mix of residential and non-residential property is purchased

Chapter 16 Business Assets and Investments

16.1 Assess how much stamp duty is payable on a distribution in specie

16.2 Describe the exemptions from stamp duty on business assets and investments

Chapter 17 Married Couples and Civil Partners

17.1 Explain and assess the stamp duty reliefs available to spouses/civil partners on transfers of assets while living together and relief available on dissolution of marriage/civil partnership

Chapter 18 Administration of Stamp Duty

18.1 Identify the accountable person for stamp duty and payment of the tax due

18.2 Describe the self-assessment system, appeals and refunds for stamp duty purposes

18.3 Describe the e-Stamping system

18.4 Describe penalties, surcharges and Revenue powers included in the SDCA 99

Chapter 19 Introduction to Stamp Duty Groups

19.1 Explain how associated companies relief operates