Dáil Éireann Debate, Tuesday - 7 March 2017
170. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 130 and 156 of 14 February 2017, if he will make provision for refunds to be issued to persons outside of the four-year rule in the event that the Court of Appeal upholds the High Court decision in respect of the deductibility of the NPPR against rental profits; and if he will make a statement on the matter. [11924/17]
View answerI am advised by the Revenue Commissioners that the applicable provision giving a right to repayment of tax is section 865 of the Taxes Consolidation Act (TCA) 1997, where a person has paid an amount of tax which is not due. However, as I advised in my response to PQ numbers 130 and 156 of 14 February 2017, section 865(4) provides that that right is subject to a statutory limit of four years from the end of the chargeable period to which the claim relates. That statutory limit is binding on Revenue as well as on the taxpayer. Decisions of the Tax Appeals Commission in differing appellant circumstances published recently have confirmed that there is no discretion in the application of the four-year rule for claiming repayments.
Section 865 of the TCA was introduced in 2003 and provides a statutory general right to repayment of tax as well as payment of interest, subject to a four year time limit. It provides that no repayment may be made based on claims submitted more than four years after the end of the period to which they relate. Prior to that there was no statutory right to repayment, though a taxpayer could sue for repayment under common law. The Minister at the time indicated that, in introducing the new arrangements, he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer.
At the same time, the general right of the Revenue Commissioners to raise assessments or make enquiries as respects taxpayer returns was also reduced to four years though in certain circumstances, for example where fraud or neglect is suspected, or in the context of the application of general anti-avoidance rules, Revenue's right to enquire or raise assessments is not time limited. Previously, the general time limit on the raising of assessments by Revenue had been ten years. The convergence of these various time limits on four years creates parity between a taxpayer's right to repayment and Revenue's powers to raise assessments.
I am further advised by Revenue that any repayment claims made in relation to the deduction of Non Principal Private Residence charges against rental profits that are received within the statutory time limits, as they apply to each year of assessment, will be retained and processed when the outcome of the Appeal case is known. Revenue also advises that they are developing a simple, easy to use process to facilitate taxpayers who may wish to lodge a claim in relation to this matter and that this will be available in the very near future.
