VATupdate

Ireland’s tax debt warehousing measures: Don’t neglect your VAT returns

Ireland Finance Minister Paschal Donohoe has reminded Irish businesses that the tax debt warehousing scheme has been extended. Tax debt warehousing enables taxpayers to ‘park’ their tax debt for a specified period of time. At the same time, Donohoe reiterated that businesses that take advantage of the measures still need to file tax returns on time.

How does Ireland’s tax debt warehousing work?

During Period 1 of the scheme, you can warehouse tax debts. Phase 1 now extends to 31 December 2021. During Period 2, no interest is payable. Period to now extends to 31 December 2022.

Taxpayers must repay all relevant tax during Period 3, when 3% interest applies.

The programme only applies to eligible businesses. Donohoe says that the measure will help businesses build up cash reserves and secure long-term sustainability.

According to Ireland’s Department of Finance, “Tax Debt warehousing has provided significant liquidity assistance to businesses during the pandemic, with over €2.4 billion warehoused by over 86,000 businesses.”

Source VATglobal

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