New President Mark Barrett outlines the Institute’s priorities for the year aheadAlso in this Edition:

� Brexit: The Vote Is In � The Future of Tax Compliance within the Tax Function � Directors’ Compliance Statement: Tax Aspects � VAT Aspects of BEPS � The Realities of VAT Compliance - A Case Study � Employment Status: The Saga Continues � The Future of Payroll and Employment Tax Compliance � Centralised Procurement Strategies:

Transfer Pricing Considerations � The Common Reporting Standard and Its

Impact on Irish Financial Institutions � Practical Guide for Principal Contractors to Avoid RCT Pitfalls

� New International Requirements on Exchange of Information on Tax Rulings

� US Tax Filing Requirements: Do You Know Your Clients’ Obligations?

� Trading Deductions on the Way to Formula 1 � Tax Appeals Commission: Shaping Jurisdiction,

Procedure and Substantive Tax Law � Meet the Members Tour 2016: A Focus

on Revenue-Related Matters � Pension Adjustment Orders: The Dangers of not Seeking Advice � The Assisted Decision-Making (Capacity) Act 2015

The Journal of the Irish Tax Institute www.taxinstitute.ie

2016 VOLUME 29 NUMBER 3 ISSN 1649-7899

Irish Tax Review

Irish Tax Review

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2016 Number 3 Interview with New Irish Tax Institute President, Mark Barrett 9 8 Interview with New Irish Tax Institute President, Mark Barrett

You took quite a different route from the norm to becoming a Chartered Tax Adviser. What was that?I decided to study law at UCC. There were elements of the BCL

degree that interested me, particularly corporate, commercial

and employment law. UCC was a natural choice as it was only

a ten-minute walk from our family home in Sunday’s Well in

Cork at the time.

When I graduated from UCC in 1993 I went to the University of

Limerick to take a Graduate Diploma in Business Administration.

I wanted to augment my law degree with a business qualification,

and that’s where my interest in tax really started.

How did you start your career in tax?I was a little bit different in deciding to become a tax specialist

immediately after finishing college. Back then, tax was generally

seen as a qualification to supplement a main qualification such

as legal or accountancy; however, I decided to only study for the

taxation exams.

I started working with FDC Tax Department, a firm of tax advisers

in Cork that specialised in capital taxes. They were looking for

someone with a law degree who wanted to pursue a career in

tax. I worked with them for three years and focused primarily on

capital taxation and succession planning. It was slightly unusual

Interview with New Irish Tax Institute President, Mark BarrettIncoming Institute President, Mark Barrett, discusses his career and the key challenges that lie ahead for the Institute with journalist, Barry McCall.

2016 Number 3 Interview with New Irish Tax Institute President, Mark Barrett 9

to go straight into that aspect of taxation, and I was quite lucky to

gain that experience so early.

Unlike most other tax specialists, who are solicitors, barristers or

accountants, I was a member of only one institute. The knowledge

and skills that I acquired have enabled me to work successfully

in a variety of different commercial environments over the years.

You then moved from local to international with a role in Kerry Group – how did that happen?To the best of my knowledge, there were only two indigenous

Irish multinational companies in Munster with tax departments

at the time – Musgraves and the Kerry Group. Most multinational

companies have tax departments now, but it was quite different

then. I worked with Tom Reynolds in Kerry, who is coincidentally

now a fellow Institute Council member. After that, I moved back

to Cork to work with PwC’s tax department, and that’s where I first

became actively involved with the Institute.

My colleague, the late Hilary Walpole, had lectured for many years

on capital acquisitions tax for the Institute in Cork, and when she

stepped back from the role, I took over. I also worked with Hilary on

her book on marital breakdown, which she wrote for the Institute.

Around that time, I got involved with the Institute’s local Cork–Kerry

Committee through John Butler, a tax partner with PwC who had

been on the committee for a number of years.

After six years with PwC I joined Moore Stephens accountants in

Cork, where I spent ten years. Ronan Daly Jermyn is one of Ireland’s

top ten law firms and, having worked in industry and accounting

practices, I am now back working with colleagues that I studied

law with in UCC. As a Chartered Tax Adviser with RDJ, I work with a

team of seven other senior tax specialists in both Cork and Dublin.

Like many other law firms, there is an increased focus within RDJ

on the provision of a full suite of corporate and legal services.

Your involvement with the Institute has been very much focused on the Revenue representation area and Revenue issues in general. How did that come about?Interacting with Revenue makes up a lot of my day-to-day work.

In dealing with Revenue cases, particularly the more complex

ones, it is necessary to have both an in-depth knowledge of tax

legislation and also an understanding of the tax administration

system. That has been one of my specialisms for many years and

one which I enjoy.

Looking back, I think it was a natural progression that I would

become involved in the Institute’s interactions with Revenue.

I have always believed that the role the tax adviser plays in

representing the taxpayer with Revenue is an important one

and that a good working relationship between practitioners and

Revenue is essential. As I mentioned earlier, my involvement with

the Institute began while I was with PwC in Cork and developed

in earnest in the early 2000s with the Institute’s Cork–Kerry

Committee. This was reorganised into the South-West Branch

Network, representing Cork, Kerry, Clare and Limerick, in 2003,

following Revenue’s internal restructure.

I have been chair of the South-West Branch Network Committee

since it was founded in 2003. When I became a member of Council,

I also became a member and then chair of the Tax Administration

Committee (TAC).

I am a member and past chairman of TALC (Tax Administration

Liaison Committee). This is the body tasked with facilitating broader

consultation between the Revenue Commissioners and the various

representative bodies, including the Irish Tax Institute, the Law

Society and the various accountancy bodies. I have also co-authored

a book on Revenue audits with Tim Quinlivan and am currently

completing the second edition with Clare McGuinness.

What are the key issues in terms of Revenue’s interaction with tax practitioners?There are so many issues and they are so varied, but obviously

some are more of a priority at different points in time.

The Revenue Technical Service is a major issue for members right

now, and the Institute has been working on this for some time,

explaining first-hand the problems experienced by members and

the challenges that exist within the system. We’ve had a lot of

dialogue with Revenue, and work is continuing on both sides.

There needs to be an increased focus on the resourcing and delivery

of Revenue’s tax technical supports, and in particular the current

model for the Revenue Technical Service (RTS) is not meeting

the needs of our members. Businesses need a timely, efficient

and responsive technical service to obtain certainty on their tax

position when entering into commercial transactions. The current

design of the RTS doesn’t allow for direct interaction with a Revenue

subject-matter expert, and this directly impacts on the level of

the service provided. Direct interaction between tax advisers and

Revenue’s tax technical experts is essential in order to resolve

2016 Number 3 Interview with New Irish Tax Institute President, Mark Barrett 11 10 Interview with New Irish Tax Institute President, Mark Barrett

complex technical issues efficiently. Such a channel of direct

communication would also enhance consistency in responses

and aid the collation of responses as part of Revenue’s knowledge

management procedures.

Irish businesses, large and small, are

facing difficult trading circumstances

for the foreseeable future. International

competitiveness is rising, and taxpayers

and their advisers are working hard to

maintain and improve tax compliance rates

that are already very high by global stand-

ards. These businesses deserve to be at

the heart of a Revenue customer service

model that aims to provide a standard of

technical support which is “best in class”

internationally.

There are other key issues on the agenda,

both for TALC and for the tax sector gener-

ally. Interpretation of legislation is one of

them. We have close to 6,000 pages of

Irish tax legislation, and interpretation

of that legislation is very important. Having guidelines on the

legislation is also vital. TALC enables both sides to bring their

perspectives to the table in an effort to reach some consensus on

an approach and interpretation. Issues around tax administration

are increasing for firms of all sizes. The Institute is continuously

engaging with members and heads of tax; what is very clear to me

is that tax administration is very high on their agendas because

they perceive a more difficult environment to do business in.

One of the areas in which legislative interpretation is causing

major challenges is the area of contractors and expenses. There

is a lot of uncertainty around travel and subsistence expenses,

especially for people with non-traditional work patterns, like those

working from home or contractors working from multiple sites.

Revenue has provided a lot of guidance, but there are still some

areas which could be improved upon, including clarity on what

constitutes legitimate business expenses. This is something which

has caused a lot of difficulties for contractors, and it impacts on

the multinational sector in particular. The Institute made a very

detailed submission to the Department of Finance, in which we

tried to capture the variety of problems involved and we stressed

the need for a new regime for travel expenses. The outstanding

complexities and ambiguities still require much attention, and I

will certainly be keeping it as a priority issue during my Presidency.

As I explained earlier, dialogue between tax advisers and Revenue

is more important than ever, and the tax

administration system certainly relies on a

partnership approach to issues which arise

within the system. Revenue recognises the

value of interacting with practitioners and

practitioner bodies and invests significant

resources in the TALC process.

What are your plans for your Presidency?Member engagement is very high on my

agenda. We have just completed our new

three-year strategic plan, and that provides

a compass in terms of focus and direction

for the Institute. That’s hugely important

given the degree of change across tax

policy, tax administration, technology and

the world of business at all levels. I want to

spend as much time as possible listening to members and finding

out what they want and need in terms of services from the Irish

Tax Institute. I also want to get as many members as possible

involved in the Institute by delivering lectures, teaching, speaking

at seminars and participating in committees. I want every member

to know what the Institute can do and is doing for them.

Membership engagement will become increasingly important.

This is as much about personal engagement as it is engagement

facilitated by technology. We want to be an open, personable

organisation that is fully in touch with the needs of our members.

Equally, everyone now has an expectation that you should be able

to use a smartphone or a tablet to arrange your affairs. Whether

that is booking holidays, going to the cinema, paying your taxes or

applying for a mortgage, it should be accessible on mobile devices

and be easy to use. As an organisation, we need to strive to provide

members and the general public with that level of functionality,

and that is something we will address during my Presidency.

The provision of world-class tax education remains core to the

Institute’s activities and services. Our education offerings are

prioritised in our new three-year strategy so as to ensure that we

continue to deliver Ireland’s premium tax qualification. Innovation

2016 Number 3 Interview with New Irish Tax Institute President, Mark Barrett 11

and investment will be at the heart of our strategic delivery in

education, as has been the position for many years. Education, like

so many other areas, is subject to the influence of technology. We

want to ensure that we meet world-class standards in that regard

and that we give our students and our employer firms an education

service that is in line with the highest standards internationally.

We will also be focusing on streamlining our communications with

members to make it easier for them to consume important informa-

tion. We all receive so many emails from a wide range of sources,

and in a busy world it can be difficult to keep on top of every email.

Our engagement with members will help us to further appreciate

the topics and issues that each member is interested in and then

target communications to them on those issues. It’s a challenge

but one that we will be addressing during my year.

Having said that, I believe that you can never lose sight of people

and relationships in the middle of all that. We are a people organi-

sation: our members work with people every day, and strong,

trusted relationships are at the core of their work. Understanding

the latest tax issues, understanding the challenges members

are facing and finding solutions to issues – all that can be done

only through authentic engagement and relationships. It doesn’t

matter what century you’re in or how fast it’s moving – talking,

listening and personal engagement will always be important.

What about Budget 2017? What are the priority issues there from the Institute’s point of view?For the past four or five Budgets we have stressed the importance of

our personal tax system in our pre-Budget submissions – in effect,

pointing out that we have lost our way somewhat on personal taxa-

tion. For example, the whole area of share options is hopelessly

complicated, particularly for SMEs. Profit-sharing schemes also

present difficulties and are quite cumbersome. The APSS scheme

is not appropriate in many circumstances, and this needs to be

addressed as well.

We also need to be competitive with the UK capital gains tax regime

at the point of sale for companies. In light of the Brexit result, we

need to be acutely aware of tax competition and how this could

impact on Ireland in the years ahead.

On PAYE, there is a requirement to amend the system to ensure

that it does not act as a disincentive to improved productivity or to

multinational corporations considering establishing in this country.

I have seen people leave this country because of the tax system.

The tax base here has become skewed. While it is progressive in

12 Interview with New Irish Tax Institute President, Mark Barrett

nature, people hit the high rate far too quickly. We have to ask if it is

really sustainable to continue to draw on a small group of taxpayers

who already contribute such a sizeable chunk of the income tax

yield. In addition, given the need for revenues for public services

and capital investment, we must also ask if it would be better to

have broader participation in our tax system.

What about the longer term future for the Institute?The Institute will continue to reflect the changing nature of the

tax profession and its role in society. We have reformed the CTA

syllabus to ensure that our qualification reflects the changing

nature of the profession. Having invested in many different

aspects of the CTA qualification – including curriculum reform,

international tax content, tax policy formulation, technology

and online capacity – the Institute is now working to enhance

the tax education experience by focusing on emerging teaching

methodologies. Our professional development programmes and

certificates also take account of the changes, and we continually

devise and design a suite of products – including publications,

certificates and seminars – that reflect the changing needs of

the profession, as well as the domestic and international tax

landscape.

And the Institute’s 50th anniversary?This is a major milestone for the Institute and, looking back over

my own time as a member, I believe we have made a major contri-

bution to Ireland as both a society and an economy during that

period. From a practitioner’s point of view, we offer gold-standard

education to both students and professionals. We also have a key

voice on tax administration issues, and we play a vital representa-

tive role for our members and in the overall administration of tax

in Ireland. We have also had an important influence on tax policy

matters – whether that was Pay and File, the personal tax system or

public information campaigns on the residential property tax, the

Irish Tax Institute has been at the centre of the discussion on them

all. Our role as a vital part of the machinery that ensures efficient

and timely tax collection every year shouldn’t be forgotten either.

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