The Minister for Finance announced on budget day 2016 that this year’s Finance Bill would tackle offshore tax evasion.
Revenue has essentially allowed about six months to the 1 May 2017, an amnesty, if you will, to those with offshore assets to regularise matters before, presumably, an “A chara” letter issues. Like Liam Neeson’s character in “Taken”, a Revenue spokeswoman encouraged compliance “Come to us before we find you, because we’re going to find you”
What is the impact of the new offshore provision post 1 May 2017?
- The new provision precludes an Irish taxpayer from availing of the possible benefits of a “qualifying disclosure” to Revenue
- The penalty for underpaid Irish tax will be substantially increased (potentially increased to 100% of any underpaid Irish tax). The increased penalty rate will apply not only to the offshore default but to any onshore default which is disclosed to Revenue at any time post 1 May 2017;
- The taxpayer’s name and settlement details will be published by Revenue in the quarterly list of tax defaulters;
- Moreover, a taxpayer will be unable to obtain an assurance that the matter will not be referred to the Direction of Public Prosecution (“DPP”) for investigation with a view to criminal prosecution.
It is recommended that taxpayers who have business or investments outside Ireland ensure that Irish income tax or gains are properly reported so they have an opportunity to correct their tax affairs, if necessary, prior to 1 May 2017.