Oireachtas Joint and Select Committees

Monday, 16 November 2020

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2020: Committee Stage

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

I thank the Deputy. The professional services withholding tax, PSWT, was introduced in 1987 and is a 20% withholding tax deducted at source from payments made by accountable persons such as Departments for certain professional services. PSWT deducted is allowed as a credit against income tax or corporation tax of the individual or company that has suffered it. While there have been some changes to the PSWT legislation since its introduction, the basic administrative procedures remain unchanged. The current procedures are labour intensive and generate a large volume of paper forms. These old-fashioned procedures are an outlier when compared to the electronic systems that are now in place for other tax. This section provides for the replacement of the current paper intensive procedures with a new electronic process. When an account of a person makes a relevant payment, instead of issuing a paper certificate with details of the payment to the service provider they will electronically update the information directly to Revenue.

Revenue will in turn make this information available to the service provider through its online service ROS.

The section also allows consequential amendments covering the filing of returns by accountable persons and the claiming of refunds by the service providers as well as other necessary amendments that are required to allow for the operation of an electronic filing system. To allow time for the necessary changes to be made to the IT systems of both Revenue and accountable persons, the implementation of these changes are subject to a ministerial commencement order.

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