Tax Appeals Commission determination 62TACD2024 regarding CT, DWT, PAYE/PRSI/USC, 2024

• Administrative Decision Number: 62TACD2024
• Year: 2024
• Date: 25 March 2024
• Respondent: THE REVENUE COMMISSIONERS

1

62TACD2024

Between:

Appellant

and

THE REVENUE COMMISSIONERS

Respondent

_________________________________________________

Determination

_________________________________________________

2

Table of Contents

Introduction.........................................................................................................................................3

Background.........................................................................................................................................3

Legislation and Guidelines..............................................................................................................6

Section 19 of the TCA 1997...........................................................................................................6

Section 20 of the TCA 1997...........................................................................................................7

Section 112 of the TCA 1997.........................................................................................................7

Section 130 of the TCA 1997 (as in force from 1 January 2011 to 30 December 2020)......9

Section 548 of the TCA 1997 (as in force from 30 November 1997 to 24 December 2017)

..........................................................................................................................................................14

Regulation 16 of the Income Tax (Employment) (Consolidated) Regulations 2001 (S.I. No.

559 of 2001)....................................................................................................................................15

Witness and Expert Evidence.......................................................................................................15

Witness Evidence –...............................................................................15

Witness Evidence –............................................................................19

Witness Evidence –...............................................................................20

Expert 1 –................................................................................................. 22

Expert 2 –...........................................................................................................28

Appellant’s Submissions...............................................................................................................36

Respondent’s Submissions..........................................................................................................39

Material Facts....................................................................................................................................41

Whether a transfer of the goodwill of the sole trade business to the Appellant took place

on .............................................................................................................................44

What the appropriate valuation of the goodwill of the sole trade business was at

.................................................................................................................................................46

Commissioners findings of material fact.....................................................................................53

Analysis..............................................................................................................................................55

Alternative Assessments...............................................................................................................56

Notices of Estimation to PAYE/PRSI/USC.................................................................................58

Schedule F assessments..............................................................................................................61

Assessment to Corporation Tax...................................................................................................61

Determination....................................................................................................................................61

Notification.........................................................................................................................................62

Appeal.................................................................................................................................................63

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Introduction

1.This is a consolidated appeal to the Tax Appeals Commission (hereinafter the

“Commission”) pursuant to and in accordance with the provisions of the Taxes

Consolidation Act 1997 (hereinafter the “TCA 1997”).

2.The appeal is brought by (hereinafter the “Appellant”)

against Notices of Amended Assessment toCorporation Tax, Dividend Withholding Tax

(hereinafter “DWT”) and Employer’s Pay As You Earn and Pay Related Social Insurance

(hereinafter “PAYE/PRSI/USC”) for the years 2012, 2013, 2014, 2015 and 2016 raised by

the Revenue Commissioners (hereinafter the “Respondent”).

3.The amount of tax in dispute in thisappeal is €326,078.49.

4.A related determination has been issued in a related appeal

M148/18.

Background

5. (hereinafter the “Director”)is a businessman who, between

and , carried on a sole trade, trading as “”

(hereinafter the “sole trade”), as a

.

6.The Appellant was incorporated in and at the time of its incorporation had two

directors, the Director with a 99% shareholding and his wife with a 1% shareholding.

7.On the Director was registered as an employee of the Appellant.

8.On the Director transferred the goodwill of the sole trade business into the

Appellant. The transfer of the sole trade into the Appellant included a valuation for the

goodwill of the sole trade of €250,000.

9.In , the amount of €250,000 was credited to the Director’s director’s loan account

in the Appellant.

10.The director’s loan account was drawn down between and as

follows:

Year

Amount drawn down from director’s loan

account €