Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I propose to take amendments Nos. 28 to 37, inclusive, together.

I move amendment No. 28:

In page 30, to delete lines 36 to 39 and substitute the following:

“(ii) ‘relevant period’ means the accounting period beginning on the first day of the period of account in which the change in accounting policy, referred to in paragraph (b), is adopted for the first time.

(b) This subsection shall apply to a change in accounting policy other than on the adoption of—

(i) an accounting standard for the first time, or

(ii) an amendment of an accounting standard for the first time.”.

Most of these amendments are technical in nature with the purpose of correcting minor drafting errors and ensuring that the legislation operates as intended. There are however two more substantive amendments.

The first substantive amendment relates to the taxation of transitional adjustments arising upon a change of accounting framework or the adoption of a new or amended accounting standard. To ensure that the "relevant amount" is taxable or deductible, as the case may be, over a five year period following the transition, it is necessary to delete “for the relevant period” from paragraph (4)(c) and to substitute “an accounting period” for “the relevant period” in paragraphs (4)(d) and (4)(e).

The main substantive amendment is number 36, which concerns the tax treatment of accounting errors. The legislation as currently drafted is inconsistent in that non-material or non-fundamental errors are subject to statutory interest and penalties whilst material or fundamental errors are not. This amendment ensures that all accounting errors should be corrected by means of amended tax returns, subject to normal time limits. Where this results in increased tax liabilities, statutory interest and penalties will apply.

In order to give effect to this amendment, the original subsections (5) and (6) have been deleted and replaced with a new subsection (5), which is based on an amalgamation of the original subsections (5) and (6).