The Revenue Commissioners face a slew of tax evaders with offshore accounts seeking to make settlements ahead of a clampdown in six months that may raise more than the €30 million targeted by the Government, according to tax experts.
The Finance Bill, published on Thursday, gives tax defaulters with hidden offshore assets until May 1st to put their affairs in order before tax authorities make more use of internationally available information on assets in tax havens.
"The yield from offshore investigations in 2015 alone amounted to €63 million, so on that basis the €30 million estimate could be perceived as somewhat conservative," said Audrey Lydon, head of private client services at EY Ireland.
Those who fail to avail of the window to regularise their tax affairs “will face a severe set of sanctions including penalties of up to 100 per cent of the tax due, publication on the quarterly tax defaulters list and possible criminal prosecution”.
Drip-feed system
Twenty-three years after the State introduced an amnesty to bring tax cheats into the system, "we've continue to see a drip-feed system" of defaulters being uncovered by various investigations, according to Denis Herlihy, managing partner at accountancy firm BDO Limerick.
“They’re now seeking to finally draw a line and get people to disclose offshore accounts once and for all,” said Mr Herlihy. “In future, I think we’ll see a string of prosecutions being pursued against offenders, obviously depending on the gravity of their actions.”
Minister for Finance Michael Noonan’s push to rein in tax defaulters comes after the disclosure of the so-called Panama Papers earlier this year, which revealed how members of the global elite used offshore companies to hide assets and property with billions of euros.
The Revenue Commissioner’s pursuit of offshore assets and income is enabled international co-operation fostered by the Organisation for Economic Co-operation and Development’s common reporting standard, to which more than 100 countries had signed up by August.
It is also helped by an agreement signed between Ireland and the United States in 2012 to improve international tax compliance.
In addition, Mr Noonan pledged in the budget to provide the Revenue Commissioners with an additional €5 million to hire 50 additional staff and invest in systems and equipment to find defaulters.
“Come to us before we find you, because we’re going to find you,” a spokeswoman for the Revenue Commissioners said last night.
