Vol. 368 No. 1
asked the Minister for Finance if, in relation to his statement to the Dáil on 1 May 1986, he will confirm the circumstances where interest is not charged by the Revenue Commissioners on late payment of tax where the late payment arises from queries by the Revenue Commissioners or where failure to settle the matter is outside the control of the taxpayer.
87.
asked the Minister for Finance whether, interest is payable in the following circumstances: (a) where a reply from the Revenue Commissioners is outstanding, thus delaying any further action on the taxpayer's part; (b) where a case is due for hearing by the Appeal Commissioner and no date for hearing is set down by the inspector of taxes; (c) where the Revenue issue a query, the reply to which does not affect the tax liability, thus delaying settlement of the case; (d) where accounts have been submitted and the Revenue Commissioners do not examine these accounts for some time and eventually a query issues and liability is settled on receipt of an immediate reply; (e) where the final tax figures have been agreed and there is a delay in the issue of a correct statement of amended liability; (f) where the Collector General does not issue demands and (g) where the Collector General issues incorrect demands.
88.
asked the Minister for Finance the outcome of his examination in relation to the charge of interest only in cases where there is a degree of culpability on the part of the taxpayer.
I propose to take Questions Nos. 86 to 88, inclusive, together. The statutory position is that if interest is to be avoided the taxpayer must pay the tax due within two months of the due date for income tax and capital gains tax and within one month of the due date for corporation tax. The tax due is the amount charged by the assessment unless that assessment is under appeal in which event the taxpayer may specify an amount which he is prepared to pay on account pending the outcome of the appeal. Tax under appeal is not otherwise payable but if the taxpayer wishes to avoid an interest charge, the payment on account must not be less than 90 per cent of the final liability.
The vast majority of appeals are settled by agreement between the taxpayer and the inspector and the negotiations are normally conducted by correspondence. An agreement in writing disposes of the appeal and interest on the balance of tax emerging for payment will arise only if that balance is not paid within the period of two months from the date of determination of the appeal. Where there is an oral agreement between the inspector and the taxpayer the terms of that agreement must be confirmed in writing by the inspector and the taxpayer can, if he is dissatisfied, repudiate the agreement within 21 days of the issue of the letter thereby keeping the appeal open. So long as the appeal remains open interest does not accrue. It will be seen that in such circumstances any delays in reaching agreements which are attributable to the Revenue do not give rise to an interest charge.
If, however, the assessment has not been applied or if a payment on account is not specified or if the payment on account is not adequate interest will run from the original due date.
I am satisfied that the provisions of the existing law are reasonable in that, where availed of, they provide adequate protection for the taxpayer.
