Minister for Finance Michael Noonan has taken aim at the use of offshore accounts to avoid tax, pledging to make it a criminal offence for individuals who fail to disclose accounts or other assets held in tax havens from next year.
“The release of the so-called Panama Papers earlier this year showed how defaulters use offshore structures and accounts to avoid paying tax,” Mr Noonan told the Dáil as he unveiled the budget, referring to the leaking of 11.5 million documents this year showing how wealthy individuals and public officials have been able to keep personal financial information private.
Mr Noonan said he would act to restrict the opportunity for offshore defaulters to use the voluntary disclosure regime with effect from May 2017.
“And I will introduce a new strict liability criminal offence to facilitate the prosecution of serious cases of offshore tax evasion.”
The exercise should yield an additional €30 million for the exchequer next year, according to supplementary information published after Mr Noonan’s speech.
The Minister also said he was allocating a further €5 million to the Revenue Commissioners to recruit 50 additional staff and invest in systems and equipment to aid audit and investigation activities.
The department expects the exercise to generate €50 million in additional revenue next year.
"With enhanced co-operation between Revenue authorities and the greater degree of disclosure obligations placed on banks and other financial institutions, any taxpayers having unreported Irish tax liabilities arising from the holding of non-disclosed offshore bank account, trust, company or other offshore asset should ensure their affairs are regularised without delay," said Joe Bollard, head of international tax at EY in Dublin. "The risk of publication on the tax defaulters list and of prosecution will significantly increase after May 1st, 2017."
