The Revenue has sent out hundreds of challenge letters to the public as part of a new investigation into offshore tax avoidance involving credit and debit cards.
The investigation involves Irish residents who have been using bank cards to access money in undeclared offshore accounts.
The Revenue discovered the tax-avoidance scheme after obtaining data about foreign credit and debit card use in Ireland from merchant acquirers, the companies that process card transactions.
“The information that the merchant acquirers provided to Revenue relates to transactions conducted in Ireland using credit or debit cards issued by financial institutions outside the State. It is Revenue’s analysis of this data, and identification of cardholders, that enables us to issue challenge letters in appropriate cases,” a spokeswoman said.
Last year, Revenue extended its offshore investigation, which has yielded more than €1.1 billion to date, by obtaining High Court orders requiring financial institutions located in Ireland to provide details of debit and credit cards issued in other countries and used here by Irish residents.
The merchant acquirers and financial institutions had until April 30th of this year to provide details of Irish residents paying for goods or services or withdrawing money using a foreign credit or debit card.
Challenge letters
Some people who receive challenge letters will have no cause for concern, the spokeswoman said. Others, however, have not paid tax on foreign earnings, or are keeping their money in undeclared offshore accounts and accessing that money using credit and debit cards issued in those countries.
The Revenue Commission began issuing the challenge letters late last year, and to date they have yielded €250,000. It is also investigating a number of investment syndicates believed to have channelled millions of euro to a foreign tax haven. These are said to have been using complex transactions and structures to avoid paying tax .
