I am advised by the Revenue Commissioners that they have a strong focus on ensuring optimal compliance with tax obligations and that issues of non-compliance are confronted and penalised. Revenue’s overall approach to managing compliance is to undertake a range of targeted interventions that are the most appropriate to the specific risks presented in individual cases. In 2012, Revenue carried out more than 537,000 compliance interventions, yielding more than €492 million. Revenue will continue to develop innovative ways to identify non-compliance and to bring to account those who fail to comply with their tax obligations. They will be assisted in this work by robust legislation to support compliance activities, including for example, the obligation that has been placed on merchant acquirers and other payment settlement entities to make returns of transactions to Revenue. Their work is also supported and enhanced with appropriate technology, including their Risk Evaluation Analysis and Profiling (REAP) risk identification system, capture of information from multiple sources, and integrated systems that facilitate case selection.
Ireland has been to the forefront in acting against the use of offshore accounts for the purposes of evading tax. Revenue set up a dedicated unit, tasked with identifying and investigating Irish residents engaged in this form of tax evasion in 2001. Further investigations targeting the settlement of funds and assets on trusts and similar offshore structures by Irish residents, was initiated in 2009. Schemes of voluntary disclosure and investigations undertaken have, to date, resulted in the collection of €1.1 billion in tax liabilities, statutory interest payments and penalties. This work is ongoing.
The Irish authorities would wish to avail of any additional information that might be of assistance in facilitating the continuing process of identifying persons evading tax through holding funds offshore. I am advised by the Revenue Commissioners, however, that they understand that neither the International Consortium of Investigative Journalists nor individual journalists involved in the investigation of offshore funds have, to date, made underlying data from their investigation available to tax authorities. Ireland will be liaising and cooperating with the authorities in other countries and with the OECD to consider how matters arising from the recent reports can be progressed.
Overall I am confident that the Revenue Commissioners are pursuing a programme that is dealing in a very determined way with tax evasion in all its forms and that their compliance programmes are under constant review to ensure that they are focused on the areas of greatest risk.
I would also advise the Deputy that Ireland has signed 68 bilateral Double Taxation Agreements and 21 Tax Information Exchange Agreements, which ensures a system of full exchange of tax information. Additionally, in December 2012, Ireland became one of the first countries in the world to sign an Agreement with the United States to Improve International Tax Compliance and Implement FATCA (Foreign Account Tax Compliance Act). In a public letter to the EU Commission on April 9th, five EU Member States, France, Germany, Italy, Spain and the United Kingdom, have hailed FATCA-type Agreements as representing a ‘step change in transparency’ and being the new ‘international standard’ for automatic exchange of tax information.
Combatting tax fraud and evasion has been a priority during our Presidency of the EU. The issue was an important agenda item at the Informal EcoFin Council meeting that I chaired last weekend. During our Presidency we have taken forward the work in a range of key areas:
- Seeking agreement on Draft Council Conclusions on the EU Commission Action Plan on fraud and tax evasion;
- Pursuing a VAT anti-fraud package;
- Chairing work at the Code of Conduct Sub-Group on a proposal to combat double non-taxation and other tax evasion.
Indeed, on foot of recent developments and progress made at the Informal EcoFin, further discussions will be held during May at senior official level on practical measures to combat tax fraud and evasion, in particular through potential progress on the Savings Directive. It is intended to return again to the issue of tax fraud and evasion at EcoFin before the conclusion of our Presidency.
