Brendan Smith
Question:71. Deputy Brendan Smith asked the Minister for Finance the actions that he will take to assist in combatting international tax evasion; and if he will make a statement on the matter. [23938/13]
View answerTuesday, 21 May 2013
Questions (71)
Written answers
I am advised by the Revenue Commissioners that they are strongly focused on ensuring optimal compliance with tax obligations, and that non-compliance is confronted and penalised. Revenue’s overall approach to managing compliance is to undertake a range of targeted interventions that are most appropriate for dealing with the specific risks presented in individual cases. In 2012, Revenue carried out more than 537,000 compliance interventions, which yielded more than €492 million. I am advised also that Revenue continues to develop innovative ways of identifying non-compliance and bringing to account those who fail to comply with their tax obligations, including those who seek to evade their responsibilities through the use of offshore accounts and structures. They are assisted in this work by robust legislation to support compliance activities, including, for example, the recent obligation that has been placed on merchant acquirers and other payment settlement entities to make returns of transactions, principally credit card transactions, to Revenue. Their work is also supported and enhanced with appropriate technology, including their Risk Evaluation Analysis and Profiling (REAP) risk identification system and capture of data from multiple sources.
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 were initiated in 2009. Schemes of voluntary disclosure and investigations undertaken have, to date, resulted in collection of €1.1 billion in tax liabilities, statutory interest payments and penalties, of which almost €19 million was collected in 2012. These investigations are ongoing and most recently have led to the uncovering of two types of cash extraction schemes with total tax at risk of €198.5 million. Recent developments have also included analysing details of payments made in Ireland using foreign credit cards. Revenue will continue to act in a very determined way to deal with tax evasion in all its forms.
Ireland is also committed to working closely with other countries to combat offshore tax evasion. 69 bilateral Double Taxation Agreements and 21 Tax Information Exchange Agreements are in place which ensure a system of full exchange of tax information. In addition, in December 2012, Ireland became one of the first countries in the world to sign an Agreement with the United States of America to Improve International Tax Compliance and to Implement FATCA (that is, the United States Foreign Account Tax Compliance Act). This type of agreement is now being hailed as the emerging international standard for the automatic exchange of tax information. Revenue also participates in the OECD Forum for Tax Administration’s Offshore Compliance Network, which is a forum for the countries concerned to share information and experiences on practical issues relating to the fight against offshore evasion.
Combating tax fraud and evasion has also been a priority during our Presidency of the EU and work has been taken forward in a number of key areas. Following a very productive discussion on the issue at the informal ECOFIN meeting in April, Commissioner Semeta and I issued a joint letter to ECOFIN Ministers inviting them to agree a range of measures to tackle tax fraud and evasion. Significant progress was made in this regard at the ECOFIN meeting on 14 May, at which agreement was reached on a mandate for negotiating amendments to the Savings Tax Agreements with Switzerland, Liechtenstein, Monaco, Andorra and San Marino to ensure equivalence of measures with the EU. Also at the ECOFIN meeting on 14 May, Ministers adopted Council Conclusions strongly welcoming the European Commission’s Action Plan on tackling tax fraud, evasion and aggressive tax planning, and reaffirming their commitment to collective action in this area working in close cooperation with the OECD and the G20. The issue of tax fraud and evasion is an important agenda item at the European Council meeting on 22 May and it is intended to return to the matter at the ECOFIN meeting in June.
Finally, I am advised by Revenue that they have published detailed guidance in relation to employer withholding tax obligations for international employees working in the State which clarifies a number of anti-avoidance measures introduced in the Finance Act 2006 to combat non-compliance with employer statutory requirements.