Enhanced Reporting Requirements (ERR)

Enhanced Reporting Requirements (ERR)

The Finance Act 2022 introduced a new reporting obligation under Section 897C of the Taxes Consolidation Act 1997, requiring employers to disclose details of certain expenses and benefits provided to employees and directors. This requirement, known as the Enhanced Reporting Requirements (ERR), came into effect on 1 January 2024.

Under Section 897C, employers are required to report specific non-taxable reimbursements and benefits provided to employees and directors to Revenue. The purpose of these reporting obligations is to enhance transparency and improve the visibility of tax-free payments made through payroll and expense reimbursement processes.

The categories of reportable benefits under the Enhanced Reporting Requirements are:

• Small Benefits Exemption payments;
• Remote Working Daily Allowances; and
• Travel and Subsistence Payments.

The reportable elements under Section 879C can be classified under the following categories:

• Small Benefit – A benefit provided by an employer to an employee that qualifies for the Small Benefits Exemption under Section 112B of the Taxes Consolidation Act 1997.
• Remote Working Daily Allowance – A tax-free payment of up to €3.20 per day made by an employer to an employee in respect of days worked remotely from the employee’s home or another part of their residence, provided that no tax is deducted from the payment.
• Travel and Subsistence Payments – Payments made by an employer to an employee in reimbursement of travel and subsistence expenses incurred in the performance of their duties, where the reimbursement is made free of tax and no tax is deducted at source.

The primary objectives of the Enhanced Reporting Requirements (ERR) are to improve transparency, strengthen tax compliance, and support evidence-based policymaking. Specifically, the reporting framework is intended to:

• Enhance Revenue’s Compliance Intervention Framework by providing greater visibility over non-taxable payments made by employers. This enables Revenue to target compliance interventions more effectively towards non-compliant employers, while reducing the administrative burden on organisations that are meeting their reporting obligations.
• Support informed policy development by providing the Department of Finance with high-quality, aggregated data on the nature and extent of tax-free benefits and expense reimbursements being provided to employees. This data can be used to evaluate existing measures and inform future tax policy decisions.
• Increase transparency and employee assurance by ensuring that non-taxable payments are properly reported to Revenue. This helps provide employees with greater confidence that such payments are being administered correctly and in accordance with relevant tax legislation.

There are three methods available to employers for reporting benefits and expenses under the Enhanced Reporting Requirements (ERR):

1. Direct Reporting Software – Employers may submit reportable benefits directly to Revenue through payroll or expense management software that supports ERR reporting.
2. Revenue Online Service (ROS) File Upload – Employers can upload a file containing the relevant reporting information through ROS.
3. Revenue Online Service (ROS) Online Form – Employers can manually enter and submit reportable benefits through an online form available within ROS.

These reporting options provide flexibility for employers of all sizes, enabling them to comply with their ERR obligations in a manner that best aligns with their payroll and expense administration processes.

While Revenue has, to date, generally adopted a pragmatic approach towards the implementation of the Enhanced Reporting Requirements (ERR) and has not widely imposed penalties for non-compliance, employers should not assume that these obligations are optional or that non-compliance will go unnoticed.

In practice, we have observed instances where employers have received correspondence and notifications from Revenue where they have failed to meet their reporting obligations under Section 897C.

Author: Rohit Dutta, Global Mobility Specialist at Vialto Partners and graduate of the MSc in International Accounting & Finance