Dáil Éireann díospóireacht -
Wednesday, 1 Jul 1998

Vol. 493 No. 4

Written Answers. - Tax Clearance Certificates.

Noel Ahern

Ceist:

112 Mr. N. Ahern asked the Minister for Finance the regulations in relation to the need for private companies to have tax clearance certificates in order to do business with State agencies; if implementation of the regulation is necessary while the Revenue Commissioners are not unhappy with tax returns; if the regulations are being universally or equally enforced by all agencies; and if he will make a statement on the matter. [16586/98]

Minister for Finance (Mr. McCreevy)

I am advised by the Revenue Commissioners that the production of a current tax clearance certificate is a requirement for the issue of certain licences, the payment of certain grants and the award of contracts. The Deputy's question is taken to refer to the operation of tax clearance in relation to contracts with State agencies or other public bodies.

Tax clearance for public sector contracts is governed by Finance Circular F49/29/84 issued in July 1995. This provides that a person seeking public sector contracts valued at £5,000, inclusive of VAT, or more in any 12 month period must produce a current tax clearance certificate or C2 certificate as appropriate and must be in possession of a current tax clearance certificate at all times during the contract period. The conditions relating to the issue of tax clearance certificates for this purpose are set out in section 1095 of the Taxes Consolidation Act, 1997. For C2 certificates, which relate to subcontractors carrying out work in construction, forestry or meat processing operations, the legal definitions and provisions are in sections 530 and 531 of the Taxes Consolidation Act, 1997.

Tax clearance certificates are issued by the Office of the Collector-General, Sarsfield House, Limerick. Intending contractors who have not previously held a tax clearance certificate must apply on a form provided by the public body awarding the contract. Contractors who have received a certificate entitled "General Tax Clearance Certificate" or a C2 certificate, obtainable from the contractor's inspector of taxes, may use that certificate for contracts with any number of public bodies. General Tax clearance certificates are renewed automatically by the Office of the Collector-General provided that the tax affairs of the contractor continue to be in order.

There is no provision for an alternative to tax clearance for the purpose of public sector contracts. Even where the contractor is aware that his/her tax affairs are in order, and that Revenue is satisfied in respect of returns and payments due, it is still necessary to obtain a certificate, as public bodies have no other means of confirming tax compliance. Normally, a certificate can be obtained within six working days.

The requirement to obtain tax clearance applies to the entire public sector, and is applied by all bodies according to the same rules. For the purposes of Circular F49/29/84, the "public sector" includes all Government Departments and offices, local authorities, health boards and other health agencies, educational bodies and all semi-State bodies whether commercial or non-commercial. For convenience, the word "contract" is used, but this is interpreted to cover situations where public authorities are buying, hiring or leasing goods, services or property or generally expending public moneys.