The Office of Revenue Commissioners is to trawl an unprecedented amount of international data and cross reference it with the records of all Irish taxpayers in a new attempt to clamp down on offshore tax evasion.
The trawl will also draw information available to Revenue from other organisations, such as the Department of Social Protection.
Under new international information sharing arrangements that come into effect from next year, Revenue will automatically be given access to the details of assets and income held by Irish individuals in financial institutions overseas.
These include areas such as Panama, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and the Isle of Man, the Bahamas, Belize and Switzerland.
It will take in countries that previously had a “wall” around them when it came to tracking down tax evasion, according to officials. Revenue has a growing analytics and information team to help it deal with the new systems and manage its attempt to catch offshore tax evaders.
Revenue will be using customised software that has been modified over recent years to cross-reference the records of Irish taxpayers with details held in over 100 other jurisdictions.
Some data has already been assessed and large amounts of money held offshore have already been identified, officials have said.
While Ireland previously had arrangements in place to allow for the sharing of information, Revenue would have to look for specific individuals on foot of suspicions or information it had.
The new arrangements, which take effect with 54 other counties from January and will be extended to a further 47 in 2018, mean that all Irish records will automatically be cross referenced with international details from now on.
Unprecedented level
While a similar arrangement has existed in the United States for a number of years, Revenue officials said the new system will give them an unprecedented level of information.
The incoming data will be matched to existing records such as names, addresses, dates of birth and tax reference numbers. It will also to be combed to find suspicious patterns, such as assets held by those who have previous records of evading tax or those who have substantial offshore assets but no obvious means of funding such assets.
The Finance Bill, recently published by Minister for Finance Michael Noonan, gave evaders six months to get their affairs in order in relation to offshore assets, ahead of the planned clampdown.
“There is a lot of data that is coming our way, we are going to be using it,” Paul Rigney of Revenue said.
“This is the last opportunity for people over the coming months to come forward because after that, the penalties are severe. There are all sorts of potential consequences, not least publication [of details] but it can lead to prosecution.”
Those with offshore assets have until May 1st to make a voluntary disclosure before Revenue uses the “full rigour” of the new system.
While planning for the new methods of clamping down on offshore tax evasion predate the publication of the so-called Panama Papers earlier this year, which revealed how offshore companies are used by wealthy individuals globally to conceal billions of euro of assets held offshore, sources said they will help prevent similar scandals in future.
