The purpose of the tax clearance scheme is to ensure that persons who derive economic benefit from having a licence/permit to conduct certain activities in the State, or who receive contracts/grants, subsidies or certain other payments from the State are in compliance with their tax obligations. The scheme also encompasses certain positions covered by the Standards in Public Office Act.
Sections 1094 and 1095 of the Taxes Consolidation Act 1997 set out the conditions that must be satisfied before a Tax Clearance Certificate (TCC) can be issued by Revenue. In particular, Section 1095 (4) states that 'a tax clearance certificate shall not be issued to a person unless:
(a) that person and, in respect of the period of that person's membership, any partnership of which that person is or was a partner,
(b) in a case where that person is a partnership, each partner, and
(c) in a case where that person is a company, each person who is either the beneficial owner of, or able directly or indirectly to control, more than 50 per cent of the ordinary share capital of the company,
has/have complied with all the obligations imposed on them by the Tax Acts.
In practical terms, I am advised by Revenue that a TCC is a written confirmation that at the date of issue of the certificate, a person has made all the necessary tax returns, paid the declared liability and there are no open issues of which the Revenue Commissioners are aware. In some instances a certificate may be issued to a person who has tax arrears provided such arrears are covered by a phased payment arrangement that has been agreed with Revenue. In the context of the self-assessment system, applicants for a TCC are not subject to a Revenue Audit before the certificate is issued.
A taxpayer may apply for a TCC through Revenue's online system at www.revenue.ie or via manual application to the relevant local Tax District. Where an applicant's tax affairs are fully up to date or, where any outstanding tax arrears are covered by an agreed phased payment arrangement, a TCC will normally issue within 6 working days. My attention has not been drawn to any companies receiving a tax clearance certificate within one or two days of application as the Deputy describes.
Where an applicant's tax affairs are not in order (e.g. outstanding tax returns or tax payments) then a TCC will not issue until all of the outstanding matters are fully dealt with.
The Table below includes the numbers of TCC applications received in 2012 and 2013 and the numbers issued in 2011, 2012 and 2013. It was not possible to collate the number of TCC applications that were received in 2011 in the time available. The Deputy should be aware that in many instances businesses that are initially refused a TCC subsequently receive certification once their affairs are brought up to date.
|
Year
|
Requested
|
Issued
|
|
2013
|
227,989
|
177,050
|
|
2012
|
220,268
|
170,220
|
|
2011
|
-
|
171,998
|
Finally the Deputy may be aware that following a review of the current tax clearance scheme by Revenue, I have brought forward a provision in the 2014 Finance Bill which, if passed by the Oireachtas, will lead to the introduction of a new electronic 'real time' system that will validate the tax clearance status of businesses/taxpayers on a continuous basis rather than just at the date of certification. This new section will be subject to a Commencement Order to allow for the development of the ICT systems required to implement the new system.
