Registering a company in Ireland has many advantages; however, there are also several compliance requirements that need to be considered. Our guide outlines the top ten compliance watchouts for registered companies.
Subscribe to our mailing list to receive updates on areas such as cashflow management, tax updates, business tips, general management and much more. We are one of the few mailing lists that provide SME's with Irish Centric news, information and tips.
1. Register a name with the Companies Registration Office (CRO)
If you have registered a company and intend to trade under that name, there is nothing else to do regarding a name. However, if you are trading under a different name to the company you’ve registered with The CRO you must register that specific name with the CRO.
It is advised that you register the name with the CRO within one month of trading. This can be completed on The CRO website or you can get in touch with MyTax if you need any assistance.
2. Register with The Revenue Commissioners
When you have completed your company registration you need to let The Revenue Commissioners know that you have formed a company. This must be complete within 30 Days of incorporation and is normally done via a Statement of Particulars. This is also known as a form 11 F.
In practice, this statement of is completed when registering for Corporation Tax through a form TRN2 (see point 3)
3. Corporation Tax
When a company has been incorporated and has commenced trading, they are required to notify Revenue and in return they will receive a Tax Reference Number. This TRN is generally referenced on invoices and other documents a company may produce.
In order to receive a Tax Reference Number, a form TRN2 must be complete. If you appoint an agent, they can do this registration via Revenue’s eRegistration.
4. Register with the Central Register of Beneficial Ownership (RBO)
Registration on the RBO is required for all persons who have control of another entity. This would traditionally be a shareholder or someone who has specific voting rights. Individuals are required to register within 5 months of incorporation.
The aim of the Directives is to deter money laundering and terrorist financing and to help sanction those who hide their ownership or control of Irish companies/societies for the purpose of facilitating illegal activities.
5. Paying yourself or Staff
As a director of a company, it’s not as straightforward to extract a salary as it is for a Sole Trader. A Sole Trader is simply deemed as drawing money from the business and is taxed on the profits of that business.
A limited company is seen as a separate legal entity, and while it may be owned by one person, it does not constitute an extension of that person.
They are required to be taxed at source and that PAYE & PRSI is to be paid over to Revenue. The company must also pay employers PRSI which ranges from 8.8% to 11.05%.
Every payment made to a director must be reported to Revenue on a monthly basis. This rule applies even if no payment is made to a director.
6. VAT Registration
After registering a company, it may be required to register for VAT or may choose to register for VAT.
If a company is providing goods and their turnover exceeds (or is likely to exceed) €75,000 they are required to register for VAT. If a company is providing services and their turnover exceeds (or is likely to exceed) €37,500 they are required to register for VAT.
A company may also elect to register for VAT in order to avail of VAT refunds on purchases and other input VAT items. Revenue will require evidence of trading to register a company for VAT.
7. Income Tax
A proprietary director is an individual who has a 15% or more shareholding in a company. As a proprietary director, they are required to file a form 11 each year, regardless of income from that specific company.
This Form 11 is due on 31 October after the year in question. For example, a proprietary director is required to file a form 11 on 31 October 2021 for the year 2020. Penalties and interest are applied if filing is missed. Preliminary tax is also a consideration for any individual filing a form 11.
8. First Annual Return
After registering a company with the CRO, a company will be provided with a first annual return date. This is 6 months after incorporation. For example, if a company is registered on 1 June 2020, the first ARD will be 1 December 2020.
A company must file an annual return with the CRO. This annual return does not require financial statements and can be completed with ease.
9. Ongoing Annual Returns
After completing its first annual return, a registered company is required to file an annual return each year. This is due 12 months after a company’s first annual return.
This can be filed early but can only be filed 9 months after a company’s financial period end. It is therefore important to consider the timing of both a financial period end and annual return rules.
Most SME’s do not require an audit, which results in a sizable saving. However, if returns are not filed on time, a registered company loses this audit exemption. The company is then required to provided audited statements for the next two years.
Late filing will also result in financial penalties.
10. Financial Statements
Every company must prepare and provide financial statements with their annual return. The nature and detail required to be included in these financial statements are dependent on the size of that company.
Dormant companies must also include financial statements with their annual returns.
While it may seem like the above compliance requirements are onerous and overly restrictive for an SME, they can be proactively managed to ensure they do not interfere with the day-to-day running of a business.
An accountant, or MyTax Ireland, can ensure you are notified prior to any compliance deadline. This approach allows SME’s to focus on their business whilst ensuring their compliance obligations are maintained.
Feel free to get in touch with us here if you have any questions or want to arrange a call to discuss futher.