Dáil Éireann Debate, Tuesday - 26 May 2026
200. Deputy Cathal Crowe asked the Tánaiste and Minister for Finance his response to recent assertions that enhanced reporting requirements introduced in January 2024 are causing small businesses and restaurants to scale back modest staff gestures such as retirement lunches and gifts for special occasions, due to concerns around compliance obligations; and if he will make a statement on the matter. [39655/26]
Amharc ar fhreagraAs the Deputy is likely to be aware, section 897C of the Taxes Consolidation Act 1997 requires employers to report details of certain expenses or benefits made to employees and directors. These requirements are referred to as the enhanced reporting requirements (ERR). The detailed reporting of these expenses or benefits commenced on 1 January 2024.
The reportable benefits relevant to the ERR are:
• the remote working daily allowance of €3.20,
• the payment of travel and subsistence expenses, and,
• the small benefit exemption.
When the legislation was introduced in Finance Act 2022, it was subject to a Commencement Order to allow sufficient time for the necessary implementation stakeholder consultation process. This legislation now provides for the ERR and requires that all benefits or payments falling within the three categories above are reported to Revenue on or before the payment is made to the employee.
While employers were not previously required to report the details of individual non-taxable benefits/expense payments/perquisites, there was always certain conditionality to be satisfied in order for an employer to provide a tax-free benefit/expense payment/perquisite. The employer was therefore required to have sufficient controls in place as well as comprehensive supporting documentation and records to substantiate the preferential tax treatment. This detailed information would have been readily available to supply to Revenue upon request.
The ongoing reporting mechanism has been designed so that once verified and approved as a non-taxable payment, the employer now simultaneously reports the details of that payment to Revenue through ERR while processing the payment.
ERR enhances Revenue’s compliance framework to ensure that the correct amount of tax is collected at the right time. It results in optimal efficiency for compliant taxpayers and for Revenue. It is also an important source of data providing valuable information to assist my Department for policy making considerations and tax expenditure reviews.
I acknowledge that various stakeholders have stated that the requirements have increased administrative requirements for taxpayers, in particular for SMEs. That said, there has been very high compliance with ERR. Over 80% of businesses are availing of the integrated reporting that has been built into software systems. This makes the process of reporting as integrated and as seamless as possible.
In addition, Revenue has undertaken extensive stakeholder engagement since the announcement of ERR in Finance Bill 2022. The topic was discussed with practitioners and representative bodies at Tax Administration Liaison Committee (TALC) meetings during 2022 and 2023, and a TALC subgroup was set up specifically to address ERR. Further, Revenue conducted a survey, engaged with employers, their agents and their representative bodies and hosted a series of webinars between September 2023 and June 2024. At a recent meeting of the Cost of Business Advisory Forum, which focused on Reporting and Compliance, ERR was again discussed.
As with all tax policy, the operation of the ERR will be monitored and kept under review by my Department.
