Kathleen Lynch
Question:56 Ms Lynch asked the Minister for Finance the progress made to date by the large cases division established within the Revenue Commissioners. [12980/04]
View answerThursday, 6 May 2004
Questions (65, 66, 67, 68)
Written answers
I am informed by the Revenue Commissioners that the division was established last October. It is responsible for ensuring the highest possible level of tax and customs compliance by 340 of the largest business enterprises. This means firms with an annual turnover in excess of €125 million. The division is also responsible for 250 of the wealthiest individual taxpayers or those with an estimated net worth in excess of €125 million. It also deals with the entire financial services sector. Business units have been built around the main economic sectors and high wealth individuals and two further specialist units concentrate on counter-avoidance work.
The division operates a two-pronged strategy to ensure compliance. This involves audit and control programmes based on assessment of the risks in any area of tax or customs. There is also direct contact with the management of large businesses to encourage and support high compliance practices. An explanation is giving on the downsides of non-compliance in terms of interest, penalties, publication and potential prosecution.
To date the division has written to all its large businesses and wealthy individuals explaining its strategy. It has met senior management of around 150 businesses as part of a programme that will involve meeting them all over the next year. Bilateral meetings have taken place with the main accountancy or tax advisory firms that deal with large businesses. Recently a seminar was held for the accountants or tax advisors.
Contact persons have been assigned to all of the large businesses and wealthy individuals and they are now working with them. This is to help ensure the growth in Revenue of knowledge of these businesses and of their sectors to allow greater understanding of the main risk areas. The office want to ensure that the taxpayer and the tax advisor's interpretation of tax, customs law and practice corresponds with its interpretation
Profiles of the risks associated with each tax and with customs have beet compiled. At present profiles of the business sectors, businesses and individuals, including risk profiles, are being assembled to ensure that the audit programmes are directed at the areas of highest risk.
Substantial training and retraining of the division's staff has been under way for some months. They are being equipped to deal with the business and technical complexities presented by large taxpayers across the entire range of taxes, duties and customs. The training includes specialised training in computer auditing and forensic auditing.
Audit and control programmes are under way in all the business units. They focus on issues associated with the risk areas identified.
Kathleen Lynch
Question:57 Ms Lynch asked the Minister for Finance the response received to date by the Revenue Commissioners to the letters sent by ten top banks to 120,000 customers warning them to regularise their tax affairs by the end of March; the number of responses received; and the amount collected to date. [12979/04]
View answer
Liz McManus
Question:81 Ms McManus asked the Minister for Finance the progress made to date by the offshore assets group of the Revenue Commissioners in their investigations into the use, for the purposes of tax evasion, of offshore bank accounts and trusts by Irish residents; the total number of such funds identified to date; and the total amount of tax collected in respect of these accounts. [12982/04]
View answerI propose to take Questions Nos. 57 and 81 together.
I am informed by the Revenue Commissioners that substantial progress is being made in the inquiry. Arising from an earlier part of the inquiry 254 individuals with trust operations in a particular offshore institution came forward, made voluntary disclosures and to date have paid €105 million. Subsequently 1,300 individuals with accounts in another offshore institution came forward, made voluntary disclosures and paid €45 million to date.
Last December, following these disclosures, the chairman of the Revenue Commissioners met the chief executive officers of the ten main Irish financial institutions who have offshore subsidiaries or branches. They agreed to co-operate with Revenue in a major initiative to tackle tax evasion by Irish residents using offshore accounts and structures.
The financial institutions arranged to notify their customers that the investigation would commence on 29 March 2004. Accordingly, they were advised that if a customer was in a default position they should ask them to avail of the opportunity to make a voluntary disclosure prior to the commencement of the formal investigation.
By the time the deadline was reached in excess of 15,000 individuals indicated that they would make a disclosure. The voluntary disclosure programme allows taxpayers a further 60 days to compute their liability and to make a payment. Therefore, payments on foot of these disclosures will be made in the period up to 28 May 2004.
From January 2003 to date payments of about €206 million, inclusive of the amounts referred to earlier, have been made in connection with inquiries into offshore assets.
Question No. 58 answered with QuestionNo. 37.
Breeda Moynihan-Cronin
Question:59 Ms B. Moynihan-Cronin asked the Minister for Finance the progress that has been made by the Revenue Commissioners in their discussions with the Portuguese authorities with a view to closing off a tax loophole that allows those who sell off assets here to avoid tax by taking up residence in such countries as Portugal. [12983/04]
View answerIn response to earlier parliamentary questions on the matter I stated that a first round of negotiations between the authorities in Portugal and the Revenue Commissioners for a protocol to amend certain provisions of the Ireland-Portugal double taxation convention was held in Lisbon last May. A further round of negotiations was rescheduled twice. Unfortunately, the negotiations had to be deferred until the week commencing 10 May 2004 as the Portuguese delegation was not available to travel to Dublin on the previous dates. It is not possible at this stage of the negotiations to comment further on their likely outcome.
As I also mentioned in my previous replies to questions on the matter, section 69 of the Finance Act 2003 amended Irish domestic law to impose a charge to capital gains tax on an individual in respect of a deemed disposal of certain assets on the last day of the last year of assessment for which the individual is taxable in the State. This is prior to becoming taxable elsewhere and where the individual disposes of these assets while resident outside the State and returns within five years. I announced this anti-avoidance measure in my 2003 budget on 4 December 2002 with effect from that date.