Michael McGrath (Cork South Central, Fianna Fail)
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109. To ask the Minister for Finance the tax heads which will apply in respect of the announcement regarding the possible warehousing of certain liabilities; when the measure will come into effect; and if he will make a statement on the matter. [5505/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the effective “warehousing” of VAT and PAYE (Employer) liabilities is currently operational. In March this year, Revenue announced that it was suspending debt collection and the charging of interest on late payment for the January/February and March/April 2020 VAT periods and the February, March and April 2020 PAYE (Employer) periods. On 7 May 2020, Revenue announced the extension of these arrangements to include the May/June 2020 VAT period and May and June 2020 PAYE (Employer) liabilities.

The warehousing scheme is available to businesses severely impacted by Covid-19 who have experienced a significant drop in turnover and been unable to pay their VAT and employer PAYE liabilities in part or in full.

These measures are being operated by Revenue on an administrative basis under the care and management provisions of the Taxes Consolidation Act 1997. However, primary legislation will be required to put the measures on a statutory footing and to provide for the appropriate rate of interest to be changed on the warehoused debts, namely:

- 0% for the “Covid-19 restricted trading phase”, the period when the business is unable to trade due to the Covid-19 related restrictions, and including the first two months after the business resumes “normal” trading;

- 0% for the “zero interest” phase, which last for 12 months after the end of the first phase;

- 3% per annum for the “reduced interest phase”, which begins after the end of the second phase.

The necessary legislative amendments to the PAYE provisions of the Taxes Consolidation Act and the Value Added Tax Consolidation Act 2010 will be brought forward in due course.

Further information is available on Revenue’s website at