In his Budget speech on 11 October 2016, the Minister for Finance announced a comprehensive programme of targeted intervention against offshore tax evasion. Positive action is required ahead of 1 May 2017 for those with undeclared income and gains from offshore assets.
Finance Act 2016, which includes legislative changes required to implement some of the budget measures announced, was signed into law by the President on 25 December 2016.
The legislative amendments come as increased data relating to offshore accounts is set to become available to the Irish Revenue Commissioners (“Revenue”) as a result of Ireland’s implementation, as an early adopter, of the OECD’s Common Reporting Standard (“CRS”). The first exchange of reported information under CRS, which will see details of offshore accounts held by Irish resident customers being passed to Revenue, is scheduled to commence in September 2017.
Finance Act 2016
The changes effected in Finance Act 2016 include:
(i) The denial of the opportunity, from 1 May 2017 to make a “qualifying disclosure” in relation to any offshore matters, defined to extend to matters that “indirectly” relate to offshore matters.
(ii) The limiting of circumstances where a “qualifying disclosure” can be made in relation to onshore matters to instances of carelessness, but not deliberate default, by a taxpayer where the taxpayer also has an outstanding liability to tax relating directly or indirectly to offshore matters.
The benefits of making a qualifying disclosure include mitigation of penalties, non-publication as a tax defaulter, and protection from criminal prosecution in relation to the tax default.
Additional Measures Announced in the Budget Speech
In his Budget speech the Minister for Finance also announced that there would be increased personnel and improved information technology infrastructure available to Revenue to analyse data received and confront non-compliance.
Opportunity for Disclosure
With the 1 May 2017 deadline set in law and the first compliance date for CRS fast approaching, now is the time for recalcitrant taxpayers to seek legal advice and address these issues.
For further information, please refer to your usual Matheson contact, or any member of our Private Client Group.