Meeting your statutory obligations - Dates for your Diary

Obligations in preparing and filing an Annual Return
A company must make its annual return every year to a date which is not later than its Annual Return Date. The Annual return Date for Companies that are submitting accounts to the year end 31 December, 2009 will in most instances be 30 September 2010. The Annual return must be presented to the Companies Registration Office not later than 28 days after its effective date. Thus, if an annual return is made up to a date earlier than the company's ARD, it should be presented to the CRO within 28 days after that earlier date.

In instances where financial statements are filed with the return, the filing deadline is either 28 days after the ARD of the Company or the Company's financial year-end plus nine months and 28 days, wherever is the earlier.

Missed Deadline
A Company that misses its filing deadline may be subject to the following sanctions:

1. Late Filing Penalty: The day after the filing deadline expires; a Company will be subject to a late filing penalty of €100. A further daily penalty of €3 per day will accrue thereafter, up to a maximum penalty of €1,200 per return

2. Prosecution: In the event that a Company has a record of persistent late filing, the CRO may impose an on-the-spot fine or resort to the summary prosecution of the Company and/or any officer in default. Fines of up to €1,904.61 can be imposed on a conviction for breach of the annual return filing requirements.

3. Strike off: Furthermore, failure to file an annual return may result in a Company being struck off and dissolved. If a company is struck off, the assets of the company become vested in the Minister for Finance, and if the business continues to trade, the owners will no longer enjoy the benefit of limited liability and so are personally responsible for any debts incurred so long as the company remains dissolved. Any person, who was a director of a company at the date of sending to that company of a strike off notice due to the non-filing of annual returns, may be disqualified from acting as director by the High Court, where the company is struck off leaving outstanding liabilities. Such order may be made by the Court on the application of the Office of the Director of Corporate Enforcement.

4. Loss of Audit Exemption: If a company’s annual return for the current year or the previous year was not filed on time, the company cannot avail of the audit exemption.

Restoration
It is possible to seek to restore a Company that has been struck off for a period not exceeding 12 months, by making an application to the Registrar of Companies. A Form H1 and all outstanding annual returns together with relevant accounts, fees and late filing penalties must be received in the CRO not later than the day before the anniversary of the company's dissolution. If a Company has been involuntarily struck off for more than a year the reinstatement process involves an application to the Irish High Court.

Corporation Tax Filing Deadlines

21 September 2010 is the deadline for the following:

• Corporation tax returns for companies with accounting periods ending between 1-31 December 2009 must be filed to avoid late submission fees
• Payment of any balance of corporation tax due by companies with accounting periods ending between 1-31 December 2009

30 September 2010 is the deadline for the following:

• Companies must file their Return of Third Party Information (Form 46G) for Accounting Periods ending between 1-31 December 2009

21 November 2010 is the deadline for the following:

• Preliminary tax must be paid by companies with accounting periods ending between 1-31 December 2010

Please ensure that you make available all necessary information to your tax advisor in order that you can take timely advice regarding corporation tax payable.

Paying Corporation Tax & Filing Obligations

Companies using the ‘Pay and File’ system to pay corporation tax and filing their returns are required to undertake the following:
• File your company’s tax return before nine months have passed from the end of the accounting period. If this date is after the 21st of the ninth month, the filing date is brought forward to 21st of the ninth month or 23rd if the return has been filed electronically. For example, if your company’s accounting period ends on 31 December 2009 then you must file the company’s corporation tax return on or before 21 September 2010 or if you or your advisor files the return electronically this is extended to 23 September 2010 (21/23 day rule).
• Pay any balance of corporation tax due when the return is being filed. This is also subject to the 21/23 day rule.

Preliminary Corporation Tax

The Collector General is to be paid the amount of preliminary tax appropriate to the accounting period. This amount must be equal to or greater than 90% of the company's final liability for the accounting period. However, special provision is made for small companies whose liability does not exceed €200,000 in the preceding chargeable period.

1. Small companies
This is a company whose Corporation Tax liability in the preceding accounting period does not exceed €200,000. These companies may base its preliminary tax on the corresponding Corporation Tax liability for the preceding accounting period.

2. New or Start-up companies
A New or Start-up company which has a Corporation Tax liability of less than or equal to €200,000 for their first accounting period is not required to pay Preliminary Tax in respect of that period. However, these companies will be required to pay their final Corporation Tax liability for that accounting period at the same time as they are required to submit their Corporation Tax return, i.e. within nine months after the end of the accounting period, subject to the 21/23 day rule.

3. Large companies
These are companies with a Corporation Tax liability exceeding €200,000 in their previous year. Such companies may notionally allocate preliminary tax payments between group members to assess the adequacy of preliminary tax payments made by the group for interest charges purposes. This may assist in reducing the interest charges that would otherwise arise for large companies if their preliminary tax payments fell short of 90%. However, of a company seeks to utilise such aggregation, it must pay 100% of its Corporation Tax liability by its return filing date.

When is Preliminary Corporation Tax due?
• If the tax liability of a company does not exceed €200,000 (in their previous accounting period), preliminary tax is payable in one installment 31 days before the end of the accounting period, subject to the 21/23 day rule referred to above.
• According to the Finance (No.2) Act 2008, a provision is made for revised arrangements for the payment of preliminary tax by large companies with a tax liability of more than €200,000 (in their previous accounting period), which may be made in two installments:
1. This is payable in the 6th month of the accounting period (i.e. 21st/23rd June for a company with calendar year accounts) and the amount payable is 50% of the corporation tax liability for the preceding accounting period or 45% of the corporation tax liability for the current accounting period.
2. This is payable (as before) in the 11th month of the accounting period i.e. 21st/23rd November for a company with calendar year accounts) and the amount payable will bring the total preliminary tax paid to 90% of the corporation tax liability for the current accounting period.
• The revised arrangements apply generally where the accounting period is more than 7 months in length.

Balance of Tax
Under the 'Pay & File' system the balance of tax due is payable at the same time as the company is due to file its return

Late submission of returns
If a company fails to submit a return on time, a surcharge will be imposed. This equals 5% of the tax due (up to a maximum of €12,695) in the case of a return lodged within 2 months of the return filing date, and 10% of the tax due (up to a maximum of €63,485) where the return is made more than two months after the return filing date. It should also be noted that companies failing to submit on time may also be subject to restrictions on certain reliefs and allowances in the event of the return not being lodged on time.

For more information contact Kevin Lavin on ++353 1 675 3151 or email kevinlavin@citytrust.ie