I remind members to ensure their mobile phones are switched off as they can cause serious problems for broadcasting, editorial and sound staff. I welcome the Minister of State at the Department of Finance, Deputy Harris, and his officials to this meeting. The purpose of today's meeting is to consider Committee Stage of the Finance (Tax Appeals) Bill 2015, which was referred to the select sub-committee by the Dáil on 1 October 2015.
Finance (Tax Appeals) Bill 2015: Committee Stage
Sections 1 to 4, inclusive, agreed to.
SECTION 5
Amendments Nos. 1, 7, 17, 36, 38, 39 and 43 are technical drafting amendments and will be discussed together.
I move amendment No. 1:
In page 7, line 13, to delete "any other enactment" and substitute "the Taxation Acts".
This amendment is being made to ensure consistency of meaning with other sections and to avoid an unnecessarily wide reference to other enactments where only the taxation Acts are relevant.
Amendment No. 7 deletes an incorrect reference to the word "withdrawal" in a subsection that contains no such reference. Amendment No. 17 ensures that a summons to attend a hearing issued by the Appeal Commissioners must refer to a particular provision in the Taxes Consolidation Act 1997. Amendment No. 36 clarifies the meaning of section 381 of the Taxes Consolidation Act 1997 by inserting missing punctuation marks. Amendment No. 38 corrects a misalignment of part of section 864 of the Taxes Consolidation Act 1997. Amendment No. 39 clarifies that the new appeals provision applies to section 927 of the Taxes Consolidation Act 1997 to the extent indicated, even though this section has been repealed in respect of periods after 1 January 2013. Amendment No. 43 inserts the missing words "registration tax" after the word "vehicle" in a provision that relates to vehicle registration tax.
Amendment agreed to.
Section 5, as amended, agreed to.
SECTION 6
Amendments Nos. 2 and 3 are related and will be discussed together.
I move amendment No. 2:
In page 8, line 15, after “functions” to insert “and shall publish any rules so adopted”.
These amendments relate to the functions of the appeals commissioners and to the terms and conditions of a commissioner's appointment. On amendment No. 2, section 6 provides for the performance by the appeals commissioners of their functions as contained in this Bill and the various tax Acts. Such functions include making decisions about accepting or refusing an appeal, arranging hearings, adjudicating and determining appeals, publishing determinations and putting in place efficient and effective systems and procedures. The commissioners must ensure that proceedings before them are accessible, fair and expeditious. Subsection (5) allows the commissions to adopt their own rules of procedure in carrying out their functions. Amendment No. 2 to this subsection provides that any rules must be published. This is to ensure that all parties to an appeal will have full information as to the procedures to be followed, will know what is expected of them, and will know what they can expect from a tax appeal commission in terms of the carrying out of its functions. Clear and transparent procedures are vital attributes of a robust tax appeals system, and this measure will assist in providing transparency and increased certainty for taxpayers which are the overall objectives of this reform procedure.
Amendment No. 3 relates to section 14, which deals with the terms and conditions of appointment for appeals commissioners who are to work solely as appeals commissioners on a full-time basis. Amendment No. 3 is being made to clarify this restriction. It provides that in addition to not holding any other paid office or employment, a serving appeals commissioner may not carry on any trade, business or profession. This would prevent a commissioner from acting in consultancy or business management roles. The impending appointment of two new appeal commissioners on a full-time basis, as heretofore, serves to reinforce the perception of independence and impartiality in the resolution of tax disputes.
Amendment agreed to.
Section 6, as amended, agreed to.
Sections 7 to 13, inclusive, agreed to.
SECTION 14
I move amendment No. 3:
In page 11, line 21, after “payable” to insert “or carry on any trade, business or profession”.
Amendment agreed to.
Section 14, as amended, agreed to.
Sections 15 to 33, inclusive, agreed to.
SECTION 34
Amendments Nos. 4 to 6, inclusive, and 8 are related and will be discussed together.
I move amendment No. 4:
In page 22, line 29, after “Acts” to insert “or an estimate of tax made under section 989(2) or 990(1)”.
Section 34 inserts a new Part 40A containing 48 separate sections into the Taxes Consolidation Act 1997. It contains provisions relating to the entire appeal process and to the appeals commissioners' conduct in management of that process, commencing with the making and acceptance of appeals, progressing through adjudication, hearing, determination and publication and finishing with appeals to the courts against appeals commissioners' determinations. Amendments Nos. 4 and 5 are being made to the new section 949A, which contains the definitions and interpretations used in Part 40A. The definition of "assessment" is too narrow, in that it does not take into account of certain types of estimates that are made by the Revenue Commissioners and that are treated in the same way as tax assessments for the purpose of appeals. The definition is being broadened to include estimates made in respect of shortfalls in monthly and annual remittances by employers of income tax deducted from employees' wages. The definition of "tax" takes the meaning given to it by section 960A of the Taxes Consolidation Act 1997. It is considered that adopting section 960A and its list of taxes and duties is not appropriate. For example, it does not include a reference to customs duties, which are appealable, and it does include a reference to penalties, appeals in respect of which are dealt with by the court and not by the appeals commissioners. For this reason, the definition is being amended to refer specifically to the full range of taxes and duties under the care and management of the Revenue Commissioners. The purpose of the amendment is for clarity in that regard.
Amendment No. 6 is being made to the new section 949E, which provides for the giving of directions by the appeals commissioners to parties to an appeal in respect of information to be provided by them on how the appeal is to be conducted. In line with the new focus on transparency, and to be consistent with other provisions in the Bill, this amendment requires a party such as Revenue, which applies for a direction from the appeals commissioners, to notify the other party, the taxpayer, of the direction for which it has applied. Thus, each party is kept informed about the actions of the other party.
Amendment No. 8 inserts an additional paragraph (e) into subsection (2) of the new section 949I, which deals with the notice of appeal a taxpayer is required to submit to the appeals commissioner. The amendment is intended to allow some flexibility to the appeals commissioners in the design of such a notice where they consider that information additional to that already provided for is warranted.
On amendment No. 8, obviously there is flexibility in this regard, but this creates an open-ended provision whereby the Appeal Commissioner can decide on any other matters. Are there restrictions as to what an Appeal Commissioner could do, which could make the process too cumbersome to appeal? While four different areas are laid out in the legislation, the fifth namely, the additional amendment essentially allows an Appeal Commissioner to make a stipulation. How will this take effect? Will it be on a case-by-case basis or will it be standard?
It will be on a case-by-case basis. The Appeal Commissioners will be entrusted to make these decisions on a case-by-case basis.
The amendment includes the phrase "any other matters that, for the time being, are stipulated by the Appeal Commissioners for the purposes of this subsection". The Minister of State should correct me if I am wrong, but someone who is making an appeal will be guided by this provision in terms of "the grounds for the appeal in sufficient detail for the Appeal Commissioners to be able to understand those grounds" and then "any other matters". It would be a case in which people would need to know what those matters were before making the appeal, and if it were on a case-by-case basis, that would be quite difficult.
This amendment relates to the notice of appeal. It provides for "any other matters that, for the time being, are stipulated by the Appeal Commissioners". I will seek clarity on this point. The contents of the notice of appeals are listed in respect of what they should specifically include, such as the names and address of the appellant and so on. This provision is being included as a safeguard in case there are specific other matters that might arise in a specific case that have not been considered in the legislation. The circumstances foreseen are outlined in some detail, but this is to provide flexibility for any matters that might arise in a specific case.
It pertains to a specific case. If I am appealing a decision of the Revenue Commissioners, I will need to know what I must do in respect of this subsection and my notice of appeal. At this point, I will know I must include my name and address, my PPS number, where the appeal is being made and the grounds for the appeal. As this is to give notice to the commissioners, the commissioners cannot pre-empt my notice by stating this, that and the other as well. My question is whether this flexibility is being provided in order that the commissioners can decide that in addition to the aforementioned four items, they also, in every other appeal in the future, will require a particular item of information.
The answer is "yes". As this new system beds down, the Appeal Commissioners may come to a view that there is a need for a further item of information, and this is to provide them with the flexibility in this legislation for that. However, members already have accepted an amendment providing that any such rules in this regard must be published and have already adopted that rule. Previously, in amendment No. 2, I included a provision that changes to rules, new rules or any rules, must be published in order that the taxpayer understands precisely what he or she is required to. This amendment is providing for flexibility as the system beds down and as the Appeal Commissioners may decide other information is necessary that has not been prescribed in legislation. However, the rule must be published.
To clarify, because the Minister of State mentioned it would be on a case-by-case basis, is this how it will operate, or will it be a standard addition to declare, for example, one's postal address or one's X, Y or Z will also be needed, and that this would apply to everybody?
To clarify, it is likely to be more general.
I thank the Minister of State.
Amendment agreed to.
I move amendment No. 5:
In page 23, line 8, to delete “has the meaning given to it by section 960A” and substitute the following:
“means any income tax, corporation tax, capital gains tax, value-added tax, excise duty, customs duty, stamp duty, gift tax, inheritance tax, local property tax or any other levy or charge that is placed under the care and management of the Revenue Commissioners”.
Amendment agreed to.
I move amendment No. 6:
In page 25, between lines 15 and 16, to insert the following:
“(11) Where a party applies in writing for a direction, the party shall, at the time of such application, send a copy of the application to the other party.”.
Amendment agreed to.
I move amendment No. 7:
In page 26, line 6, to delete “or withdrawal”.
Amendment agreed to.
I move amendment No. 8:
In page 27, to delete lines 8 to 10 and substitute the following:
“(d) the grounds for the appeal in sufficient detail for the Appeal Commissioners to be able to understand those grounds, and
(e) any other matters that, for the time being, are stipulated by the Appeal Commissioners for the purposes of this subsection.”.
Amendment agreed to.
Amendments Nos. 9 to 13, inclusive, and 15 form a composite proposal and will be discussed together.
I move amendment No. 9:
In page 30, line 9, to delete “preliminary”.
The Bill envisages that as part of their case management function, the Appeal Commissioners will hold informal preliminary hearings in advance of the more formal full hearing at which evidence will be presented.
It is expected that preliminary hearings will deal with such matters as reviewing the progress of the appeal, identifying any additional information to be submitted by parties and giving whatever directions are considered necessary in order to advance the proceedings. However, it seems that the phrase "preliminary hearing" is causing confusion because, for example, such a hearing can be held at any stage in the proceedings and that it is more in the nature of a meeting than a hearing. For this reason, I propose that all references to "preliminary hearings" be changed to "case management conference" to better convey the substance of what is involved.
On the removal of the reference to the word "preliminary" before the word "hearing" in amendment No. 9, it is considered that a full hearing may be warranted for the Appeal Commissioners to decide whether a late appeal by a taxpayer should be admitted.
Amendment agreed to.
I move amendment No. 10:
In page 31, line 33, to delete "preliminary hearing" and substitute "meeting in the nature of, and referred to subsequently in this Part as, a case management conference".
Amendment agreed to.
I move amendment No. 11:
In page 32, line 2, to delete "preliminary hearing" and substitute "case management conference".
Amendment agreed to.
I move amendment No. 12:
In page 32, line 3, to delete "further".
Amendment agreed to.
I move amendment No. 13:
In page 32, line 5, to delete "preliminary hearing" and substitute "case management conference".
Amendment agreed to.
Amendments Nos. 14 and 16 form a composite proposal and will be discussed together.
I move amendment No. 14:
In page 33, line 27, to delete "Subject to subsections (2) and (3), every" and substitute "Every".
I will not pursue this amendment as I intend to resubmit it on Report Stage to propose only the deletion of subsection (3). I want to address that aspect. We had a good deal of discussion on this issue during the pre-legislative scrutiny stage of the legislation and I have also referred to it on this Stage. I do not see the need to include subsection (3). If an individual is given the right to request a session in camera, that is what will happen. The five requirements set out in subsection (2) for the holding of a hearing in camera suffice. They cover cases where it is necessary in the interests of public order or national security; to avoid harm to the public interest; to maintain the confidentiality of sensitive information - this could be interpreted in different ways as the provision is very wide; to protect an individual's right to respect for his or her private and family life; or in the interests of justice. The Appeal Commissioners having such discretion should suffice. Section 34 is being removed and all of the process is to be conducted behind closed doors. I would not see many going before the Appeal Commissioners to say, "I want this discussed or out in the open." I know that there are different views on this issue and that this is a change from what was envisaged originally, but I genuinely think it is moving in the wrong direction and that we should return to what was envisaged originally when the legislation was published and presented for pre-legislative scrutiny.
I thank the Deputy for tabling the amendments. This is an issue to which the Minister and his officials have given considerable consideration because, as the Deputy said, different views have been expressed. The amendments indicate a concern about the holding of hearings on tax appeals in public and the Deputy has highlighted his intention to submit similar amendments on Report Stage. I want to flag our perspective on this issue and where we are coming from.
In Chapter 4 of Part 4, section 949Y provides for the default position of public hearings. This is subject to the right of a taxpayer to a private hearing on request to the Appeal Commissioners. It is also subject to the Appeal Commissioners' discretion on whether to hold a hearing or part of a hearing in private where they consider circumstances specified in subsection (2) of the new section 949Y of the Taxes Consolidation Act 1997 apply. These circumstances include, as the Deputy said, the need to maintain the confidentiality of sensitive information, to protect a person's right to respect for his or her private or family life and in the wider interests of justice and the public interest. The effect of the Deputy's amendments would be that all appeal hearings, without exception, would be held in public, with no allowance being made for Appeal Commissioners' discretion or the wider interests of justice and the public interest, as outlined. The Deputy is likely to change this on Report Stage.
The proposal in respect of public hearings was contained in Revenue's submission to the Minister during the public consultation on the reform of the tax appeal system. The reason given for the proposal was that it would ensure transparency and accountability and enhance public confidence in the tax system. The public would see that the tax system was being administered in an even-handed way by Revenue and subject to oversight by an independent and impartial tax appeal commission. Such a move would also be in line with best international practice and other Irish administrative fora in which public hearings are the norm.
Revenue also referred in its submission to the fundamental principle of law enshrined in the Constitution that court proceedings should be held in public. While justice must be done, it is also important that it be seen to be done. In this regard, the in camera rule in tax cases in the High Court and the Supreme Court was removed in the 1980s. While the Appeal Commissioners are an expert tribunal and not a court, it can be argued that the principle of public proceedings should also apply to them. The Minister was persuaded of the merits of these views and decided to legislate for a system of public hearings that would contain the necessary safeguards to ensure certain matters would not be in the public domain.
During the pre-legislative scrutiny of the Bill by the committee, conflicting views on the matter were expressed by various committee members and other parties. Support for the idea of public hearings was expressed by Deputy Pearse Doherty and also by Revenue and the Appeal Commissioners. Other parties, including the Irish Tax Institute and a number of members of this committee, expressed strong views against public hearings, citing such reasons as the reluctance of taxpayers to take an appeal if hearings were to be held in public and the impact on business of the release of commercially sensitive information. Ultimately, while allowing for the possibility of public hearings, the committee stated in its report to the Minister that it would prefer to give an appellant discretion about the choice of having a public or private hearing. The Minister's decision to accept the committee's recommendation was influenced by the strong views expressed at the committee's hearings. He sees the potential benefit of public hearings and would like to see the matter being kept under review as the new appeal system becomes established. At this time, therefore, he is not prepared to accept Deputy Pearse Doherty's amendment.
I take on board what the Minister of State has said. Obviously, we heard from a wide range of opinions, including members of the committee. It is like a court of law. It is like saying that if a man was accused of manslaughter or murder, the case should be tried in public but that if he wanted it to be held in private, he could make an application and the courts would have to hold it privately. We know what would happen in such a case. In the context of the valid points made, the difference is that many people who will appeal will win their case - we have seen the statistics - whether it be in terms of the additional information required or because the wrong determination was made originally.
The issue of dissuading people from appealling or maintaining the confidentially of commercially sensitive information for businesses is dealt with in subsection (2). I imagine it relates to commercial information for a business. That issue is covered in subsection (2)(c), while paragraph (d) covers protecting an individual's right to respect for his or her private and family life. I do not know how we will review this aspect because if 98 of 100 cases in the next 12 months are held in camera, does that mean that we should say this is not working? My view is that we should do it the other way around because the Appeal Commissioners should ensure the five provisions set out which allow them to provide for the holding of a session in camera should be used. That would be more beneficial because we would be reviewing subsection (2) as it was originally envisaged. If it is not working and are cases in which sensitive information should not be released or people request a hearing in camera for legitimate reasons, we should review it. I hope I am wrong, but I can imagine that the majority of people who will make appeals will seek, as is their legal right, to have them conducted in private.
I have a different view from that of Deputy Pearse Doherty on this matter. We held hearings during the pre-legislative scrutiny phase when different views were expressed by members of the committee, practitioners and other stakeholders. From my point of view, it is a fundamental right of taxpayers to have their cases heard in private, if they so wish. The offices of the Appeal Commissioners are not a court of law.
I accept that justice proceedings before the courts have to be generally dealt with in public. The reality is that if it was at the discretion of the Appeal Commissioners, as provided for in subsection (2), and there was no subsection (3), the taxpayer would be taking the risk that the Appeal Commissioners would decide that the case should be heard in public. In practice, that would be a deterrent to people. Information that I might regard as sensitive might not be regarded as sensitive information by the Appeal Commissioners. I firmly believe that taxpayers have the right to have their cases heard in private before the Appeal Commissioners. On Second Stage, I welcomed the change to the Bill that we had examined during the pre-legislative stage.
The Minister came forward with the concept of all hearings being heard in public. This idea was supported by Revenue and the appeals commissioners. Obviously, there was a pre-legislative stage at this committee. The Minister has not all accepted all the recommendations that were made at that time. It is a question of the Minister's judgment. The Minister is cognisant of the very strong views that were expressed by many members of this committee and by many stakeholders that came before the committee. That is the result of the change the Minister announced on Second Stage, as outlined by Deputy Michael McGrath. It is important to say that this Bill will bring a new level of transparency and openness, in the sense that all determinations will now have to be published in a mandatory fashion. It is fair to say that many determinations had not been published. I think the new provision to which I have referred, which will ensure all determinations are published, will bring a new and additional layer of transparency to the process. I am sure this is something to which we will return on Report Stage. We can discuss it further then. The Minister was swayed by the strong views expressed by this committee when it reported to him following the pre-legislative stage.
We will not tear the backside out of this one. Obviously, the Minister is-----
We might use more parliamentary language in future.
That is very parliamentary in the part of the world where I reside.
I might give the Deputy a different set of words to use the next day.
I have never been furnished with the list of words that are not to be spoken in this House. I believe in tax transparency and in the right of individuals to have certain dealings that are private. The Minister of State has expressed the Minister's view on this matter. I am not sure what his personal view is.
The Minister and I are always ad idem.
Very good. I will come back to this matter on Report Stage, when we will have a further go at it. This will need to be reviewed. It is important that we take this approach to a great deal of legislation. I know the Minister of State will not agree to write it into the legislation that this will be reviewed in 12 months or whatever. I hope the Minister, Deputy Noonan, does not return as Minister for Finance after the election, but if he does-----
I am surprised.
-----there should be a commitment from the Government that there will be a review of this section within a short period. That would allow us to see how it is working, whether it is effective and whether it is in line with the spirit of where the majority of the committee wanted it to go. I was a minority voice in this regard during the pre-legislative stage.
Deputy Pearse Doherty sometimes does being a minority voice very well. While we are on the subject, obviously I hope the Minister, Deputy Noonan, is returned as Minister for Finance. I agree largely with what the Deputy has said about section 21. It is important that we keep legislation under review. Section 21 will enable the appeals commissioners to prepare and submit reports to the Minister on their activities and on any issues they believe appropriate. It also provides that the Minister may require the commissioners to prepare and submit various reports. The Minister, Deputy Noonan, and I think this is an issue that should be kept under review. I am sure we will return to it again on Report Stage.
I remind Deputy Pearse Doherty that there is a process within the finance committee whereby legislation can be reviewed a year after it is enacted. This means that whoever happens to be back here a year from now can look at that process.
Is the Chairman going to change his mind?
No. I will definitely not change my mind.
Amendment, by leave, withdrawn.
I move amendment No. 15:
In page 33, line 28, to delete "(other than a preliminary hearing)".
Amendment agreed to.
Amendment No. 16 not moved.
I move amendment No. 17:
In page 36, line 19, after "consequences" to insert ", under section 949AU,".
Amendment agreed to.
As amendments Nos. 18 and 19 are related, they may be discussed together.
I move amendment No. 18:
In page 36, line 25, to delete "as soon as practicable".
Both of these amendments relate to section 34. Amendment No. 18 is a minor technical amendment to the proposed new section 949AF of the 1997 Act, relating to the provision of written determinations by the appeals commissioners. It removes any risk of ambiguity arising from the use of the phrase "as soon as practicable" in this section and the provision of a clear time limit of 21 days for the written notification of determinations by the appeals commissioners in the related new section 949AJ. Amendment No. 19 is also a minor technical amendment to the proposed new section 949AG of the 1997 Act. It is intended to clarify that in adjudicating and determining appeals, the Appeal Commissioners will not always be required to confine themselves to considering the same matters that Revenue was required to consider in making its decisions. These are both technical amendments that are being proposed for the purposes of clarity.
I ask the Minister of State to clarify again what is meant by the removal of the phrase "as soon as practicable".
Sure. We are trying to remove the ambiguity from the use of the phrase "as soon as practicable" by providing in the related section 949AJ for a clear time limit of 21 days for the written notification of determinations by the commissioners.
Where does that appear in this legislation? I understand that "as soon as practicable" is being deleted from line 25.
If the Deputy looks at page 36, he will see that the proposed new section 949AF of the 1997 Act currently provides that "the Appeal Commissioners may, at the conclusion of a hearing, make the determination referred to in section 949AJ orally but such a determination shall be reduced to writing as soon as practicable thereafter". I am proposing the deletion of the phrase "as soon as practicable" from this section. This is being done to prevent any confusion with the proposed new section 949AJ(5) of the 1997 Act, on page 37, which provides that "the appeals commissioners, not later than 21 days after determining the appeal, shall notify the parties in writing". We are keen to make it very clear that the written determinations must be delivered not later than 21 days after the determination of the appeal. The Minister and I were concerned that the inclusion of the phrase "as soon as practicable" in one section and the inclusion of the phrase "not later than 21 days" in another section might cause ambiguity.
Okay.
Amendment agreed to.
I move amendment No. 19:
In page 36, line 31, to delete "In adjudicating on" and substitute "Unless the Acts provide otherwise, in adjudicating on".
Amendment agreed to.
As amendments Nos. 20 to 22, inclusive, amendments Nos. 24 to 28, inclusive, and amendments Nos. 33 and 34 are related, they may be discussed together. Amendments Nos. 27 and 28 are consequential on amendment No. 26 and amendments Nos 25 to 28, inclusive, are physical alternatives to amendment No. 24.
I move amendment No. 20:
In page 39, line 6, after "to" to insert "the Circuit Court or".
This group of amendments, and certainly my own amendments, relate to the major outstanding issue in the Bill as I see it. I refer to the removal of the right to appeal a decision of the Appeal Commissioners to the Circuit Court. This issue was considered in some detail during the pre-legislative hearings held by this committee some months ago. While the Government moved on the issue of holding hearings in public, the Minister has not moved on the issue of removing the Circuit Court appeal. I would like to make a number of points in this context. The right of a taxpayer to appeal a finding of fact to the Circuit Court has been in place for almost half a century. It is associated with the fundamental right of taxpayers to redress. In my view, the removal of that right would be a huge step that would limit the access of taxpayers to justice. For many people, appealing on a point of law to the High Court is simply not a feasible option because of the costs associated with it. In addition, the legal grounds for any appeal to the High Court are very narrow and must relate to a point of law. The reality is that the majority of taxpayers will have no recourse beyond the Appeal Commissioners.
I acknowledge that the number of cases which go before the Circuit Court having gone through the Appeal Commissioner system is modest but the latter is an argument for retaining that option for taxpayers who feel they need it. There have been occasions where the Circuit Court has found in favour of the taxpayer. If the reason being proffered for the change is the level of delay in the Circuit Court system, it is not a good enough one for changing a fundamental pillar of the administration of our tax system. If the argument is that some people seek to delay the final adjudication in their cases, which may well be the situation in a small number of instances the Circuit Court rules provide that the Revenue Commissioners can seek costs against those taxpayers. No one is arguing that the right of appeal to the Circuit Court should be retained simply to delay the final adjudication of cases. I am arguing for its retention because taxpayers, having gone through the normal appeals process with the appeal commissioners, deserve the right to have their cases heard before the Circuit Court. That should be retained. It should be retained on the basis that misunderstandings or misinterpretations of the facts of their cases, which can often be very complex, should be put before a Circuit Court if the appellant feels the issue is serious enough. I do not fully understand the logic behind this important change to our taxation regime, which is why I am putting forward the consequential amendments in respect of the substantive issue, namely, retention of the option to appeal to the Circuit Court.
I agree completely with Deputy Michael McGrath. It is a fundamental point in the context of the Bill and it is a fundamental right of an individual to appeal. I recall the points we made on Second Stage and those that were made by the joint committee. This is one of the areas in which there was no division among committee members on the question that the right of appeal to the Circuit Court should be maintained for all the reasons set out, including the cost implications and the fact that the High Court only allows appeals on points of law. This is the right of citizens. There is no argument for this not to be maintained. As Deputy Michael McGrath said, there was a strong argument put forward that some people were abusing the system and appealing to the Circuit Court in order to delay the findings of the Revenue. We had individual cases that went on a number of decades. That is a system that needs to be fixed and not a matter requiring the removal of the right of every individual to appeal to the Circuit Court. It is a trend we are seeing in legislation that the right of appeal to the Circuit Court is being stripped away and replaced with the High Court. I would really caution against going down this direction. I would like to hear if there are other arguments for taking away the right of appeal.
I am obliged by another commitment to be absent from the meeting for a time. Is there any objection to Deputy Kieran O'Donnell taking over as chair while I leave? No. Is that agreed? Agreed.
Deputy Kieran O'Donnell took the Chair.
I thank Deputies Michael McGrath and Pearse Doherty for their amendments on the reinstatement of the Circuit Court stage of the appeal process. Let me put forward the Minister's arguments as to why we are not in a position to accept them. On amendment No. 26 proposed by Deputy Pearse Doherty, it is clear the Deputy intends that the status quo on the Circuit Court stage be retained. However, it has been pointed out to me that the provisions contained in his amendment appear to be based on the Taxes Consolidation Act as it was first consolidated in 1997 and not on the current version of the Act as amended in the intervening years. The relevant section, which is section 942, was amended by the Finance Acts 2005 and 2007 in some important respects. However, I take the substantive point the Deputy is making and I want to address his amendment and the others as presented. The current appeals process provides for an appeal by a taxpayer against a determination of the Appeal Commissioners to a judge of the Circuit Court. This Circuit Court stage is a complete rehearing of the appeal. The proceedings do not take any account of what may have transpired at the Appeal Commissioners stage and it is the determination of the Circuit Court judge that prevails. Prior to taking a matter to the Appeal Commissioners, taxpayers have the option of looking for a review of a Revenue decision. This can be sought with either a Revenue officer who was not involved in the decision or an independent external person who has appropriate expertise. Such reviews are available to all taxpayers who have a dispute with Revenue before the appeal commissioner stage of the process.
I thank, as does the Minister, the Deputies for their contributions on Second Stage but I refute strongly the assertion that there is a policy pattern within Government to remove the right of access to the Circuit Court for citizens and that the intention behind the proposal is to prohibit people from appealing. Rather, it is the case that the Minister is not persuaded about the necessity of having an appeal to he Circuit Court and considers that the disadvantages significantly outweigh the advantages. Reforms in the Bill will ensure a more robust, transparent and streamlined procedure under which a route of appeal to the Circuit Court is no longer necessary or one over which the Minister can stand. The Appeal Commissioners are a specialist expert tax tribunal and the Minister is determined that this status be acknowledged and strengthened where possible.
Under the new appeals regime, the Public Appointments Service will select candidates for appointment as Appeal Commissioners based on the specific requirements of the job and will look for appropriate tax and legal expertise, experience and qualifications. This is absolutely no reflection on the expertise of the current and former Appeal Commissioners but merely a statement of the strengthened provision to ensure that appellants continue to get high levels of professional service. All Appeal Commissioners will require the appropriate tax and legal experience and qualifications, which has not been the case before albeit that being no reflection on the expertise and skills of current or former Appeal Commissioners. The Bill contains provisions that will underpin this specialist expertise with a clear independence from Revenue and a fair and impartial appeal proceedings. The reform is intended to produce a better-resourced, more efficient and transparent appeals commissioner stage. It will see more flexible and active case management as we have already discussed by Appeal Commissioners, publication of written determinations in a mandatory fashion, and a streamlined case-stated procedure for appeals to the High Court. In contrast, the modus operandi of Circuit Court rehearings appears anomalous and the continuation of the Circuit Court stage of the appeals process has the potential to undermine much of the proposed reform.
The current tax appeals process is out of step with the procedures of many other expert appellant tribunals. Some examples of decisions by public bodies that can only be appealed by way of an appeal to the High Court on points of law are decisions made by An Bord Pleanála, the Financial Services Ombudsman, the Office of the Information Commissioner, the Irish Financial Services Appeals Tribunal, the Labour Court, the Refugee Appeals Tribunal, the rent tribunal, the social welfare appeals office, the tenancy tribunal of the Private Residential Tenancies Board and the valuation tribunal in respect of commercial rates. Unfair dismissals cases were previously appealable from the Employment Appeals Tribunal to the Circuit Court but this process has ceased following the recent establishment of the Workplace Relations Commission. As such, this is in no way out of step with a number of other expert tribunals and how they interact with our courts system.
I appreciate completely that it can be expensive to take a case to the High Court. We do not believe it is necessarily as high as the €100,000 minimum mentioned in some quarters. While I appreciate that the high cost may be a barrier to participation, should the Circuit Court stage be retained, it would be open to Revenue to appeal a Circuit Court determination against it so that taxpayers may find themselves before the High Court in any event. The Bill is intended to provide for an efficient expert tribunal to address disputes that may arise between taxpayers and the Revenue. Retaining the Circuit Court stage in a reformed and streamlined process which will be better resourced is not a position over which the Minister can stand. The appeals process is one of a range of avenues of redress open to taxpayers who feel aggrieved at decisions made by Revenue officials or, indeed, by their behaviour. Taxpayers also have access to Revenue's internal and external review processes as well as avenues such as judicial review and to the courts, up to an including the Court of Justice of the European Union in relevant cases. By providing for the recruitment and selection of suitable experts and for streamlined procedures for the making and hearing of appeals, the Bill aims to ensure an efficient and cost-effective use of public resources and, indeed, the costs incurred by a taxpayer in bringing an appeal. The proposal to allow rehearings before the Circuit Court runs contrary to this objective. Retaining the Circuit Court stage of the appeals process has the potential to unnecessarily delay the resolution of tax disputes.
A great deal has rightly been made of the importance of transparency.
When matters go before the Circuit Court, no record is created, and a decision or determination is not necessarily published. In terms of ensuring that specialists with the legal and tax expertise have an opportunity, independent of Revenue, to assess an appeal, that arrangement is in place. The transparency process is in place. We therefore do not see the Circuit Court process as necessary in that regard. It follows a long line, which Deputy Pearse Doherty acknowledges or possibly does not agree with, in terms of a number of other expert appeal tribunals which operate in a similar fashion.
We are not going to reach agreement on this. I do not believe the argument from the Minister of State is strong enough to change a system that has been in place for up to 50 years. The reality is that the costs involved in going to the High Court are higher than those for the Circuit Court, although we can argue about the figures.
The main point running through the Minister of State's response seems to be that the appeal commissioners are best placed to make the final decision as they have the forensic expertise in taxation law. He does not believe taxpayers should have the right to go to another forum where that level of expertise might not exist. Under the proposed system, taxpayers can only go to the High Court on the interpretation of a point of law.
There can be facts in dispute in a case which, in my view, are best adjudicated by a member of the Judiciary, by the Circuit Court. It can come down to an interpretation of the facts of the case. The point of law issue is obviously dealt with in the High Court. The number of cases going before the Circuit Court is very small and I do not believe it is necessary to close down that avenue for those concerned.
There have been cases where the appeal commissioners found against the taxpayer but the Circuit Court overturned the decision. If this new system had been in place for those cases, an injustice would have been perpetrated against the taxpayers involved. It is not a perfect system, yet the Circuit Court is well placed to make the final decision in the tiny number of cases which go before it. On the Minister of State's very last point, I would assume that, as with every other court decision, a judgment is published.
I doubt we are going to reach agreement on this. I would like to make the point that this system is in place since 1853, which is an awfully long time. That is probably why we need to reform it. When it was put in place, before Irish sovereignty, there were special commissioners, which were an arm of the Revenue Commissioners rather than the independent appeal tribunal which now exists.
With all due respect to judges, it is worth pointing out that a Circuit Court judge may encounter a tax case very infrequently. To establish an expert tribunal and then to allow an appeal by way of full re-hearing in a forum which neither has, nor professes to have, the same expertise in tax matters seems inconsistent with what we are trying to do. A complete re-hearing can only be justified if there are reasons to suppose that poor decisions on a matter of fact are a particular problem with the appeal commissioner. There has been no suggestion that this is the case. Referring a case when we accept the bona fides and expertise of an appeal commissioner to a forum which does not have the same level of expertise is inconsistent.
I would like to put on record a quotation from the Supreme Court judge in the 1998 case of Henry Denny & Sons (Ireland) Ltd. v. the Minister for Social Welfare, which is particularly relevant to the role of courts and expert administrative tribunals:
I believe it would be desirable to take this opportunity of expressing the view that the courts should be slow to interfere with the decisions of expert administrative tribunals. Where conclusions are based upon an identifiable error of law or an unsustainable finding of fact by a tribunal such conclusions must be corrected. Otherwise it should be recognised that tribunals which have been given statutory tasks to perform and exercise their functions, as is now usually the case, with a high degree of expertise and provide coherent and balanced judgements on the evidence and arguments heard by them it should not be necessary for the courts to review their decisions by way of appeal or judicial review.
Both I and the Minister for Finance maintain the view that the system we are putting in place will provide a better appeals process for those who wish to appeal decisions of the Revenue Commissioners in an independent fashion at an expert administrative tribunal with a level of expertise which the Circuit Court probably does not have, or profess to have.
The expertise is not there in the Circuit Court and it does not profess to it. We are not arguing about that. There is an Appeal Commissioner in place now, where the expertise exists, as I am sure the Minister of State agrees. I am sure he will also agree that people have appealed the decision of those experts and have won in the Circuit Court. Revenue did not appeal that to the High Court. It is clear in those cases, the experts got it wrong and the judges in the Circuit Court got it right. The Minister of State is taking away the right of appeal in cases where an injustice may have been done by the experts - it is very hard to be right all the time. The decision can be appealed on a point of law but the difficulties with entering into that process, particularly in terms of cost, are prohibitive to many citizens. The Minister of State's arguments do not stack up.
We have fundamentally different perspectives on this. If we are serious as an Oireachtas, I do not see the point of putting in place new and robust structures to ensure an expert, specialist, independent administrative appeal tribunals, if we then refer cases back to a body which I and Deputy Pearse Doherty both acknowledge does not possess the same level of expertise. I cannot second-guess why Revenue would decide not to appeal a decision of the Circuit Court to the High Court. There could be a range of factors in that regard, as the Deputy knows.
We are putting in place a new and more robust structure which I believe will best serve taxpayers. I do not believe we are going to reach agreement on this.
I would argue that the only reason the Revenue Commissioners would not appeal the decision to the High Court is that they knew they would likely lose. They are not people to stand on the sidelines; they will pursue someone if they think they are right.
History has shown us that if the process the Minister of State is putting in place had been there, many in the State would not have had justice served to them in their tax affairs.
I do not want to get into specific cases before the Circuit Court. I certainly would not second-guess Revenue's reasons for not appealing further. It is not for me to ask questions at this committee, but I would like to know if any member is of the view that the decisions of all bodies - An Bord Pleanála, the Financial Services Ombudsman, the Information Commissioner, the refugee tribunal, the rent tribunal, the Social Welfare Appeals Office - should now be appealed to the Circuit Court as well. I accept that we are dealing with this one matter here. We have a tradition, in some cases very long standing and in others, due to reforms, less so, where an expert appeal tribunal is put in place in the knowledge that it contains the expertise, independence and legal and tax skills to provide the fair, independent, transparent appeal to which the taxpayer and citizen has a right.
Without going into that debate, I would stress that many citizens have been - I must be careful in terms of my parliamentary language-----
Deputy Pearse Doherty is on a roll.
This is a particularly bad word. I am sure it appeared in the book at one stage.
Many people did not have justice served by An Bord Pleanála and had no recourse. It is not our job to second-guess planners but some of the decisions were absolutely crazy. Individuals have been left high and dry as a result of those cases. I know some of them personally. Some decisions have touched individuals in my own family. That is in answer to the Minister of State's question as to whether we should just leave it. The experts are not always right and people should have a right to appeal.
Should one appeal the judgment of an expert to a non-expert? That is the issue.
This provision is only being removed because of the original argument that people are using it to delay the process.
If that is the case, there are other ways to address this. The number of people who are appealing is very small.
I do not accept that it is the rationale behind this. It is about the expert independent appeal tribunal and, as I have said, it follows in the line of a number of reforms and long-standing practices in some cases with other expert administrative tribunals.
Amendment put and declared lost.
I move amendment No. 21:
In page 39, line 14, after "to" to insert "the Circuit Court and/or".
I will withdraw this and reconsider submitting it on Report Stage.
Amendment, by leave, withdrawn.
Amendment No. 22 not moved.
I move amendment No. 23:
In page 41, between lines 4 and 5, to insert the following:
"(5) A report shall subsequently be amended by the Appeal Commissioners to state the result of any appeal to the Circuit Court or the High Court arising out of the determination, together with the result of any subsequent appeal from such a decision of the High Court to the Court of Appeal.".
This is somewhat related to the debate we had but it is relevant none the less. It relates to where the appeal commissioners make a report of a determination and there is a subsequent decision under the existing system by the Circuit Court and under the proposed system in the High Court on the issue of a point of law. The question posed by the amendment and the issue I am seeking to address is whether the appeal commissioner's report takes account of that decision or accords and reports that decision. Is the decision of the court, as such, stapled back to the decision of the appeal commissioners and put up for view at that stage?
I thank the Deputy. One of the key reforms being introduced, as the Deputy knows, is that the appeal commissioners will be required to publish on the Internet a report of all their determinations. A report will have to state whether an appellant has requested that a statement of the case be prepared by the appeal commissioners in regard to the making of an appeal to the High Court against the appeal commissioner determination. This will provide an indication to all that determinations may be revised by the courts at a later stage.
Deputy Michael McGrath has proposed that the published reports of the appeal commissioners should also contain whatever determinations a court or courts subsequently make relating to an appeal. I can see the potential benefit of this proposal in making available the full picture for each appeal. However, I can also see that it would be impractical to implement and an onerous burden on the Appeal Commissioners. The Appeal Commissioners are responsible for their own stage of the appeals process and, with the limited exception of whether the High Court might refer an appeal back to them for determination, cease to have any involvement in an appeal after it has been determined by them. It may take several years, as the Deputy would appreciate, for an appeal to be finally determined by the courts.
The parties to any court proceedings are the Revenue Commissioners and the taxpayer. The Appeal Commissioners are not a notice party to a subsequent appeal to the courts and will not be aware of any subsequent court proceedings or decisions or if the party settled the matter by agreement among themselves. There is no obligation on the courts to notify the Appeal Commissioners of their judgment and it is not appropriate that they be required to do so. In the normal course of events, court decisions are published by the Courts Service and the public has access to the decisions at that stage. I am not in a position to accept the Deputy's amendment but I reiterate that when the Appeal Commissioners publish a determination, they will have to indicate at that stage if they have been asked to prepare a case by the appeal commissioners to make an appeal to the High Court.
I thank the Minister of State. At least that would provide some link for a person viewing the details of the determination and lead them to look to the High Court or Circuit Court decision under the present system. My essential point is that if somebody is looking at determinations by the Appeal Commissioners in a public forum online, they should be able to see the full picture, as the Minister of State noted, instead of having to look at a number of different sources and trying to trace it through the system. I take the point that it is not straightforward because the appeal commissioners may not necessarily be a party to or be notified of the final decision. I have made the Minister of State aware of the point.
Amendment, by leave, withdrawn.
Amendment No. 24 not moved.
I move amendment No. 25:
In page 41, line 10, after "Court" to insert "or Circuit Court".
I will submit this again on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 26:
In page 41, between lines 14 and 15, to insert the following:
"(3) Any person aggrieved by the determination of the Appeal Commissioners in any appeal against an assessment made on that person may, on giving notice in writing to the inspector or such other officer as the Revenue Commissioners shall authorise in that behalf (in this section referred to as ‘other officer’) within 10 days after such determination, require that the appeal shall be reheard by the judge of the Circuit Court (in this section referred to as ‘the judge’) in whose circuit is situate, in the case of—
(a) a person who is not resident in the State,
(b) the estate of a deceased person,
(c) an incapacitated person, or
(d) a trust,
the place where the assessment was made and, in any other case, the place to which the notice of assessment was addressed, and the Appeal Commissioners shall transmit to the judge any statement or schedule in their possession which was delivered to them for the purposes of the appeal.
(4) At or before the time of the rehearing of the appeal by the judge, the inspector or other officer shall transmit to the judge the prescribed form in which the Appeal Commissioners’ determination of the appeal is recorded.
(5) The judge shall with all convenient speed rehear and determine the appeal, and shall have and exercise the same powers and authorities in relation to the assessment appealed against, the determination, and all consequent matters, as the Appeal Commissioners may have and exercise, and the judge’s determination shall, subject to section 943, be final and conclusive.
(6) Section 934(2) shall, with any necessary modifications, apply in relation to a rehearing of an appeal by a judge of the Circuit Court as it applies in relation to the hearing of an appeal by the Appeal Commissioners.
(7) The judge shall make a declaration in the form of the declaration required to be made by an Appeal Commissioner as set out in Part 1 of Schedule 27.
(8)(a) Notwithstanding that a person has under subsection (1) requested an appeal to the Appeal Commissioners against the assessment to be reheard by a judge of the Circuit Court, income tax or, as the case may be, corporation tax shall be paid in accordance with the determination of the Appeal Commissioners.
(b) Notwithstanding paragraph (a), where the amount of tax is altered by the determination of the judge or by giving effect to an agreement under subsection (10), then, if too much tax has been paid, the amount or amounts overpaid shall be repaid and (except where the interest amounts to less than €10) in so far as the amount to be repaid represents tax paid in accordance with this subsection it shall be repaid with interest at the rate of 0.6 per cent, or such other rate (if any) prescribed by the Minister for Finance by regulations, for each month or part of a month from the date or dates of payment of the amount or amounts giving rise to the overpayment to the date on which the repayment is made.
(9) Income tax shall not be deductible on payment of interest referred to in subsection (8)(b) and such interest shall not be reckoned in computing income for the purposes of the Tax Acts.
(10) Where following an application for the rehearing of an appeal by a judge of the Circuit Court in accordance with subsection (1) there is an agreement within the meaning of paragraphs (b), (c) and (e) of section 933(3) between the inspector or other officer and the appellant in relation to the assessment, the inspector shall give effect to the agreement and, if the agreement is that the assessment is to stand or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.
(11) Every rehearing of an appeal by the Circuit Court under this section shall be held in camera.
(12) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.".
I will resubmit this on Report Stage.
Amendment, by leave withdrawn.
I move amendment No. 27:
In page 41, line 15, to delete "(3) The" and substitute "(13) The".
I will resubmit this for reconsideration on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 28:
In page 41, line 23, to delete "(4) This" and substitute "(14) This".
I will withdraw this to resubmit it for consideration on Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 29 to 31, inclusive, are related and may be discussed together.
I move amendment No. 29:
In page 41, to delete lines 30 to 33 and substitute the following:
"(ii) an outline of the arguments made by the parties,
(iii) the case law relied on by the parties,
(iv) the Appeal Commissioners’ determination and the reason for the determination, and
(v) the point of law as set out in the notice referred to in section 949AP(2) on which the opinion of the High Court is sought.".
I will take the amendments together as they amend the new section 949AQ which relates to the making of an appeal to the High Court by way of staging a case on a point of law. Amendment No. 29 elaborates on the required contents of the document used for the purpose of a case stated for the High Court by introducing two additional matters. These are an outline of the arguments made by the parties and the case law relied upon by the parties during the appeal commissioner stage of the appeal proceedings. Arising from the additional material to be included in a case stated for the High Court, it is considered that some additional time should be allowed to the parties to consider the material prepared for the appeal commissioners. To this end, amendment No. 30 extends the time limit from 14 days to 21 days.
Amendment No. 31 provides a safeguard for an appellant in view of the three-month time limit for the preparation of a case stated for the High Court. In circumstances where an appellant fails to comply with this time limit through no fault of the appellant, it is likely that the High Court will not decline to deal with the appeal. However, it is considered prudent to provide specifically for such an eventuality. Therefore, the time limits imposed by section 949AQ are not necessarily absolute and the High Court must consider whether the interests of justice would be served when deciding whether to deal with the case stated appeal where an appellant fails to comply with the statutory time limits.
Amendment agreed to.
I move amendment No. 30:
In page 42, line 8, to delete "14 days" and substitute "21 days".
Amendment agreed to.
I move amendment No. 31:
In page 42, between lines 25 and 26, to insert the following:
"(8) The High Court shall not decline to hear and determine any question of law arising in a case stated by reason of the fact that a thing referred to in subsection (6) or (7) has not been done within the period specified by subsection (6) or (7), as the case may be, if it determines that, in all the circumstances of the matter, it would not be in the interests of justice to so decline to hear and determine that question.".
Amendment agreed to.
Amendments Nos. 32 and 35 are related and may be discussed together. If the question on amendment No. 32 is agreed, amendments Nos. 33 and 34 cannot be moved.
I move amendment No. 32:
In page 43, to delete lines 4 to 11 and substitute the following:
“Revenue Commissioners to give effect to decisions of High Court, Court of Appeal and Supreme Court
949AT.(1) Section 949AM shall apply to a determination made by the Appeal Commissioners that has been reversed, affirmed or amended by the High Court or the Court of Appeal as it applies to a determination that has not been so reversed, affirmed or amended but, in the case of a decision of the High Court that is appealed to the Court of Appeal under section 949AS, the application (by virtue of this subsection) of section 949AM does not operate for any part of the period during which the appeal to the Court of Appeal remains undisposed of.
(2) Where, in respect of a decision of the High Court or the Court of Appeal, the Supreme Court, in the circumstances specified by the Constitution, decides to exercise its appellate jurisdiction subsection (1) shall have effect as if—
(a) after 'Court of Appeal', where it first occurs in that subsection, there were inserted 'or the Supreme Court',
(b) for 'decision of the High Court that is appealed to the Court of Appeal under section 949AS' in that subsection there were substituted ‘decision of the High Court or the Court of appeal in respect of which the Supreme Court, in the circumstances specified by the Constitution, decides to exercise its appellate jurisdiction’, and
(c) for 'Court of Appeal', where it last occurs in that subsection, there were substituted 'Supreme Court'.".
This amendment deals with the requirement for the Revenue Commissioners to give effect to the determination of the appeal commissioners and the courts by, for example, amending a disputed tax assessment to reflect the tax liability as finally determined. The amendment clarifies that the Revenue Commissioners are not required to give effect to a determination where the appeals process continues after a determination has been made. This can happen where, for example, a decision of the appeal commissioners is appealed to the High Court or a decision of the High Court is appealed to the Court of Appeal or the Supreme Court.
Amendment No. 35 relates to the new section 949AU which deals with the summoning and examination of appellants and other witnesses by the appeal commissioners and which imposes a monetary penalty of €3,000 where a person who has been summoned to attend before the appeal commissioners fails to comply with the summons or, who having attended, refuses to swear an oath or to answer any lawful questions relating to the matter in dispute.
However, while the section imposes a penalty it does not deal with a situation where a person does not agree with the appeals commissioner that he or she is liable to the penalty. The amendment addresses this deficiency by providing for an application to the District Court by the appeals commissioner so that the court can determine the liability to a penalty. It is to give potential for effect to the penalty. I recommend these amendments.
I am not supporting that because it means the subsequent amendments relating to the Circuit Court cannot be moved. It is therefore not agreed to.
Amendment put and declared carried.
Amendments Nos. 33 and 34 cannot be moved.
Amendments Nos. 33 and 34 not moved.
Amendment No. 35 has already been discussed with amendment No. 32.
I move amendment No. 35:
In page 43, between lines 33 and 34, to insert the following:
“(4) Where—
(a) in the absence of an agreement between a person and the Appeal Commissioners that the person is liable to a penalty under this section, or
(b) following the failure by a person to pay a penalty under this section that the person has agreed a liability to, the Appeal Commissioners are of the opinion that the person is liable to the penalty, the Appeal Commissioners shall give notice in writing to the person of that opinion and that notice shall specify—
(i) the provision under which the penalty arises,
(ii) the circumstances in which the person is liable to the penalty, and
(iii) the amount of the penalty to which the person is liable, and include such other details as the Appeal Commissioners consider appropriate.
(5) Where a person to whom a notice has been given under subsection (4) does not, within 30 days after the date of the notice—
(a) agree in writing with the opinion contained in that notice, and
(b) make a payment to the Appeal Commissioners of the amount of the penalty specified in that notice, the Appeal Commissioners may apply to the District Court for that Court to determine whether the failure or refusal referred to in subsection (1) by the person gives rise to a liability to the penalty referred to in that subsection.
(6) The Appeal Commissioners shall give a copy of any application under subsection (5) to the District Court to a person who is the subject of the application.”.
Can the Appeals Commissioner apply to the District Court at the end of this year for that court to determine whether a failure or refusal referred to in subsection (1) by the person gives rise to the liability or penalty referred to in that subsection?
Yes.
It is not the High Court?
No, because this does not have anything to do with the actual substance of the hearing or the tax matter before it. It is merely to ask the District Court, which is the court that deals with such penalties, whether it wishes to impose a monetary penalty of €3,000. If we are serious about this being an expert administrative tribunal, it is important that people take it seriously and turn up. If they do not turn up and do not co-operate, there is a monetary penalty. It is to allow the appeal commissioners to enforce that monetary penalty should people decide that they do not wish to comply with it.
Would the District Court have any role in determining whether the person was liable for the penalty in the first place?
Yes, my understanding is that it would.
Obviously, in making such a determination, the District Court would need to be familiar with the tax code and be experts in this regard.
I do not believe so. They just have to be clear on the law as to whether somebody should or should not have turned up at the Appeals Commissioner, as opposed to the detail. As the Deputy will know, it is the monetary sum of €3,000 and those limits that merit the matter being dealt with in the District Court. One would hardly want to take that to the High Court.
Sorry?
One would not want to take that to the High Court. Given that the monetary penalty is €3,000, it would be dealt with at the level of the District Court. It is not the same, though, as dealing with the substance of the actual case to decide whether or not to impose a penalty for not turning up.
Nobody is suggesting that it is. The Minister of State is jumping to conclusions here.
The Deputy was trying to make a nice little link there.
There is a valid point here, however. They are not the experts in taxation.
If the appeal commissioners are the best people to determine whether somebody is liable to a penalty or whether a tax liability applies, then why would we allow people in the District Court to do so, given that it does not profess to have that type of expertise, to use the Minister of State's own words in regard to the Circuit Court?
We are not asking them to do that at all. We are merely asking them to enforce a penalty for somebody not co-operating with an administrative tribunal. We are not asking them in any way, shape or form for their view on the substance of the matter in terms of the tax issue being appealed. It is merely whether or not somebody should have turned up and complied with an expert administrative appeals tribunal, so I do not think we are comparing like with like.
No, but it is not a case where one is going to the Circuit Court and saying, "We've made a determination. Please apply this €3,000 penalty to Mr. or Mrs. X". One is basically going to the District Court to determine whether there was a failure or refusal-----
To turn up.
-----referred to in subsection (1) by the person, and if that gives rise to a liability.
Yes, but whether there was a failure to turn up and to co-operate, not whether there was a failure to determine on tax or any sort of tax expertise. The District Court would certainly not profess to have that expertise. This is a matter of whether the Deputy or I believe somebody should co-operate and if they are asked to co-operate and turn up but do not do so. We already have the monetary penalty in the Bill and on Second Stage, we discussed how to enforce that should somebody not turn up. The District Court enforces penalties of that nature should somebody not wish to co-operate, although one would expect people to co-operate. I do not see where else it would fit within our legal system.
If we just need to determine whether or not they turned up, which is obvious to any Tom, Dick or Harry, why do we have to tie up the District Court with such a simple matter? Are the appeal commissioners not competent to determine that they did not turn up and just levy the €3,000 fine if it is that simple?
My understanding is that this is the common procedure - that our courts system is the one that enforces the penalty. If the Deputy wishes to propose another way of doing it he can but this is the normal one.
The Revenue is important.
This is not a tax, however. To be clear, the Revenue-----
By way of clarification, I might ask the Minister of State a question.
Sure.
Is it the case that amendment No. 35 is effectively articulating what is-----
Already in the Bill.
In amendment No. 35, the Minister of State is effectively putting into the legislation the legal position as it currently stands.
That is correct but it is also to ensure that a penalty can be imposed.
There is nothing particularly new in this aspect.
There is nothing particularly new but there is also no point in having a penalty in legislation that cannot be enforced.
So it is an administrative procedure which brings clarity to the situation.
I am trying to bring clarity to matters, that is all.
I am just interested, although I know the answer of the Minister of State is that this is the way it has always happened. However, for the last 180 years we also had the right to appeal to the Circuit Court which he has just got rid of overnight. I have a genuine, no-nonsense question. I presume there will not be that many cases but why would we tie up the time of the District Court in terms of applying this penalty when it is so automatic? They will either refuse to appear, refuse to answer questions under oath or refuse to swear the oath.
The honest, no-nonsense answer to the question is that the Revenue has to enforce penalties through the District Court and that is why this provision is there. The Revenue Commissioners themselves go to the District Court to enforce penalties. On Second Stage, we agreed that a penalty should exist and that people should co-operate. The way of legally enforcing that is through the District Court. This is simply clarifying that if somebody turns up and refuses to accept or pay the penalty, then our legal system kicks in at the level of the District Court, which is in my view the common-sense place for it to exist.
Amendment agreed to.
Section 35, as amended, agreed to.
SECTION 36
I move amendment No. 36:
In page 51, lines 27 and 28, to delete “in a form prescribed by the Revenue Commissioners” and substitute “, in a form prescribed by the Revenue Commissioners,”.
Amendment agreed to.
Section 36, as amended, agreed to.
Section 37 agreed to.
SECTION 38
I move amendment No. 37:
In page 62, to delete line 13 and substitute the following:
“(f) in section 789(3) by deleting “, and in particular the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law”, and”.
The Bill contains a large number of amendments to the various Taxation Acts necessitated by the new appeals provisions. While the appeals process itself, in terms of the involvement of the appeals commissioners, is self contained in the provisions of the new Part 40A being inserted into the Taxes (Consolidation) Act by section 34 of this Bill, other provisions that are relevant to appeals are spread throughout the various Taxation Acts.
Amendment No. 37 from the Minister for Finance amends section 789 of the Taxes (Consolidation) Act 1997, which amendment was initially inadvertently overlooked.
The amendment removes the reference to appeals in this section regarding the specification of matters in respect of which Revenue may make regulations for certain pension products. As a consequence, any appeal under section 789 will be dealt with under the provisions of this enactment without reference to other regulations made by Revenue.
Amendment agreed to.
Section 38, as amended, agreed to.
SECTION 39
I move amendment No. 38:
In page 65, to delete line 26 and substitute the following:
“(i) in subsection (1) by substituting the following for subparagraph (ii) of paragraph (c) and all the words in that subsection appearing after that subparagraph down to and including “specifically provided,”:
“(ii) all matters and questions relating to any relief so measured, in relation to which a right of appeal from a decision is, otherwise than by subsection (1A), not specifically provided,”,
and”.
Amendment agreed to.
I move amendment No. 39:
In page 66, line 19, after “section 927” to insert “(in so far as that section continues to apply by virtue of section 129(5) of the Finance Act 2012)”.
Amendment agreed to.
Amendments Nos. 40 and 41 are related and will be discussed together.
I move amendment No. 40:
In page 67, lines 32 and 33, to delete “Revenue officer” and substitute “person”.
Amendments Nos. 40 and 41 to the new sections 959AF and 959AK, respectively, replace references to a “Revenue officer”, the “Revenue Commissioners” and “inspector” with the neutral reference to “person” to ensure these sections can deal with the fact that different types of assessment, namely, income tax, domicile levy and universal social charge, are stated to be made by different Revenue persons.
Amendment agreed to.
I move amendment No. 41:
In page 69, line 11, to delete “by a Revenue officer”.
Amendment agreed to.
Section 39, as amended, agreed to.
Sections 40 to 42, inclusive, agreed to.
Schedule 1 agreed to.
SCHEDULE 2
Amendments Nos. 42 and 44 are related and will be discussed together.
I move amendment No. 42:
In page 78, line 30, after “Act 1997” to insert “or section 121, as the case may be,”.
These amendments to section 21 of the Stamp Duties Consolidation Act 1999 and section 67 of the Capital Acquisitions Tax Consolidation Act 2003, respectively, clarify that because disputes about land valuations may involve rights of appeal under two separate provisions, references to assessments which are not appealed becoming final and conclusive have to refer to an additional section in both cases. The amendments insert the necessary references to the additional sections.
Amendment agreed to.
I move amendment No. 43:
In page 80, line 12, after “vehicle” to insert “registration tax”.
Amendment agreed to.
I move amendment No. 44:
In page 82, line 16, after “paragraph (a)” to insert “or section 66, as the case may be”.
Amendment agreed to.
Schedule 2, as amended, agreed to.
Title agreed to.
Bill reported with amendments.