Since 1992, in the context of the abolition of exchange control, Irish intermediaries – banks or professional advisers – who act for or assist Irish residents, individuals or companies in opening foreign bank accounts are obliged to make a return of this fact to Revenue. Irish residents are obliged to report the opening of foreign bank accounts to Revenue in their annual returns of income. Since 1974 Irish residents have been liable to income tax in respect of income arising from assets or moneys transferred abroad and certain information about such transfers may be sought by Revenue.
Tax evasion is a worldwide problem. EU and OECD measures have been taken. As recently as last November we adopted the savings directive, the basis of which will be that member states will exchange information. There were various proposals but the final conclusion was that there should be a recommendation that member states exchange information.
The EU Presidency and the Commission are to enter into key discussions with key third countries such as the United States, Switzerland, Liechtenstein, Monaco, Andorra and San Marino. Furthermore, all member states must commit themselves to the adoption of these measures in all relevant, dependent or associated territories such as the Channel Islands, Isle of Man and dependent and associated territories in the Caribbean. Recently, the OECD also drew up a report and made recommendations.
This issue has been looked at on a worldwide basis. The EU savings directive will tackle the problem as the Isle of Man is a dependent or associated territory of the United Kingdom. There are legitimate reasons for many people having bank accounts abroad. In Ireland there are billions of pounds in the system from residents of other countries in legitimate operations. Irish residents are not permitted to have accounts in an IFSC company but accounts are held by residents of other countries.