Tommy Broughan (Dublin North East, Labour)
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Question 88: To ask the Minister for Finance her views on a standardised tax and accounting year from 1 January to 31 December for all companies in line with the Government tax and social welfare year; and if he will make a statement on the matter. [9379/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Under the general scheme of corporation tax provided for in the Taxes Consolidation Act 1997, corporation tax is charged on the profits of a company arising in a financial year but the tax is assessed on the company by reference to accounting periods. The starting point for determining a company's taxable profits and liability to corporation tax is, therefore, the company's profits for the relevant accounting period as computed in accordance with generally accepted accounting standards. Section 27 of the Act provides that for corporation tax purposes an accounting period may not be longer than 12 months duration. The fact that companies' accounting periods differ as regards length and timing does not affect the charge, assessment, collection and recovery of corporation tax. It is difficult, from a tax point of view then, to see what benefit would arise from introducing a standardised tax and accounting year for companies.

There are various business, financial, company law and administration issues which a company must take into consideration in setting its accounting period. Many companies are members of groups and their accounting periods are aligned with those of the parent company and other members of the group, some of which may reside in overseas jurisdictions. In the circumstances, it is likely that the introduction of a standardised tax and accounting year for all companies would be unduly restrictive and would impose unnecessary administrative burdens on companies who, as a consequence of the measure put forward by the Deputy, may be required to change their accounting year or provide more than one set of audited accounts.