Tax evaders with offshore income and assets have been put on notice to pay any outstanding liabilities before the Revenue Commissioners make greater use of internationally available information to launch a planned crackdown next year.
The Revenue specifically requested that a measure be included in the Finance Bill, published yesterday by Minister for Finance Michael Noonan, that would give tax evaders six months to get their affairs in order in relation to offshore assets.
A Revenue spokeswoman said this was in advance of “a greater clampdown on offshore assets next year”.
The new rules come into force on May 1st, giving taxpayers currently in default a six-month window to put their affairs in order.
“It is essentially putting those who may have a tax liability on a six-month notice that the Revenue will be making greater use of new information that is available internationally to chase up monies owed,” the spokeswoman added.
The intention is to make use of the greater information exchanges and co-operation that now exist between tax authorities worldwide.
It also follows on from the publication of the 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.
The Panama Papers were leaked to Süddeutsche Zeitung and shared with The Irish Times and other media groups through the International Consortium of Investigative Journalists, and stories relating to the files were then published.
The Revenue says greater pursuit of offshore assets and income is made possible by co-operation such as the OECD’s common reporting standard, which will soon see over 100 countries sharing tax information.
This is complemented by the agreement signed between Ireland and the US in 2012 to improve international tax compliance.
Precarious
“Using the new provisions in the Finance Bill, Revenue will maximise the impact of information shared under these agreements,” the spokeswoman added.
“Tax defaulters who use offshore facilities will find themselves in a very precarious position if they do not quickly come forward.
“The message for anyone with a tax default involving offshore income, accounts or assets remains a very clear one – don’t wait for the Revenue to find you, come forward and make your disclosure now.”
The new measure is likely to lead to a windfall for the Revenue between now and May.
Revenue will no longer allow any mitigation of penalties in settlements relating to offshore assets on which tax has been evaded even where the taxpayer makes a “qualifying disclosure”.
Until now, anyone approaching the Revenue voluntarily was able to avail of lower penalties on the tax owing. Penalties could be reduced by up to 50 per cent in such cases.
The Bill also amends how the quarterly published list of tax defaulters is presented.
Defaulters who have reached a settlement with the Revenue on taxes owing along with interest and penalties, but who have not paid the money due under that arrangement, may now have that noted in the list.
