For school building projects, procedures are in place to mitigate against the possibility of appointing a main contractor who is not tax compliant. Following the tender process and before a contract is put in place, the recommended bidder must satisfy the standard requirements which are taken from the Department of Finance Capital Management Works Framework. These requirements include confirmation of tax clearance.
With regard to building projects funded by my Department, contractors wishing to tender for major projects must sign a Personal Situation Declaration under Oath confirming that they are in compliance with Regulation 53 of SI 329 of 2006. Any contractor failing to provide this declaration is excluded from tender competitions. Contractors must also produce a Tax Clearance Certificate, or, demonstrate a satisfactory level of tax compliance before they are awarded a contract.
A building project is a complex arrangement of contractual relationships between the client, the main contractor, specialist sub-contractors, domestic sub-contractors, suppliers of materials, suppliers of plant etc. In general all sub-contractors employed on education sector building projects are employed directly by the Main Contractor or indirectly by the Main Contractor through other sub-contractors.
Following a tender process last year, my Department appointed a private company to conduct random audits on school building projects to verify compliance with the relevant clauses in the Public Works Contracts. If an audit uncovers any matters of concern regarding tax compliance such matters will be referred by my Department to the Revenue Commissioners.
The Deputy will be aware that issues relating to tax compliance fall within the remit of the Revenue Commissioners. The Relevant Contracts Tax (RCT) system introduced in 2012 applies to all payments made by a principal contractor to a subcontractor under a relevant contract (this is a contract to carry out, or supply labour for the performance of relevant operations in the construction, forestry or meat processing industry). RCT applies to both resident and non-resident contractors operating in the construction, forestry or meat processing industry.
If the Deputy has information of instances where irregularities have occurred then my Department's advice is that these should be notified by the Deputy to the Revenue Commissioners.