Dáil Éireann debate -
Thursday, 20 Apr 2000

Vol. 518 No. 5

Written Answers. - Tax Clearance Certificates.

Ruairí Quinn

Question:

121 Mr. Quinn asked the Minister for Finance the sanctions, if any, available under law or by way of administrative practice in the event of a tax clearance certificate being applied for by a person or a company knowingly not entitled to it; and if he will make a statement on the matter. [12228/00]

Minister for Finance (Mr McCreevy)

To obtain a tax clearance certificate an applicant must have complied with the obligations regarding the payment and remittance of taxes, interest and penalties and the delivery of returns due to Revenue. Where those obligations are not complied with by the applicant, the Collector-General is entitled to refuse to issue tax clearance. A certificate is issued for a maximum of 12 months but may be issued for a shorter period.

It is a matter for determination by the Collector-General in each case whether an applicant for a tax clearance certificate has satisfied, at the time of application, the obligations for the pay ment and remittance of taxes, interest and penalties and the delivery of returns due to Revenue.

No offence is committed by an applicant for a tax clearance certificate where the applicant believes that the application may or will be unsuccessful. However, if an applicant for a tax clearance certificate knowingly or wilfully furnishes incorrect information in support of the application then the applicant may be liable to prosecution under section 1078 of the Taxes Consolidation Act, 1997.

Ruairí Quinn

Question:

122 Mr. Quinn asked the Minister for Finance the plans, if any, he has to examine the effectiveness of the system of supplying tax clearance certificates prior to the awarding of public contracts; and if he will make a statement on the matter. [12229/00]

Minister for Finance (Mr. McCreevy)

The existing procedures for the award of public sector contracts of a value of £5,000, inclusive of VAT, or more, within any 12 month period, require the contractor to produce either a valid tax clearance or C2 certificate. To obtain a tax clearance certificate an applicant must have complied with the obligations regarding the payment and remittance of taxes, interest and penalties and the delivery of returns due to revenue. Where those obligations are not complied with by the applicant, the Collector-General is entitled to refuse to issue tax clearance. A C2 certificate relates to the building, meat processing and forestry industries. Issue of a C2 certificate is subject to similar conditions as regards the payment of tax and delivery of returns.

I am satisfied that the existing arrangements for tax clearance are adequate and represent a fair balance between the State's need to protect its flow of tax revenues and the needs of business to function without an excess of regulation. However, the operation and effectiveness of the tax clearance system continues to be subject to review.