Dáil Éireann díospóireacht -
Wednesday, 16 Oct 2002

Vol. 555 No. 3

Written Answers. - Tax Yield.

Richard Bruton

Ceist:

174 Mr. R. Bruton asked the Minister for Finance the revenue raised from undisclosed offshore accounts, distinguishing the elements of tax, interest and penalties; the institutions the payments were made by; and the type of liability which properly falls on the financial institutions and on the individuals in these cases. [18434/02]

Minister for Finance (Mr. McCreevy)

I am informed by the Revenue Commissioners that comprehensive information of the kind requested by the Deputy is not readily available as the element of yield from a Revenue audit or investigation which may be related to an undisclosed offshore account is not recorded separately in the ordinary course.

However, separate records are kept in relation to two particular high-profile instances of evasion related to offshore accounts. These are the National Irish Bank cases involving the Clerical Medical insurance company in the Isle of Man and the Ansbacher cases which have a Cayman Islands connection. Recoveries to date for these two categories of cases are shown in Table 1 – broken down between tax, interest and penalties, and payments on account.

Table 1

Category	Settled Cases	TaxUnderpaid	Interest andPenalties	Open CasesPayments onAccount
	€ million	€ million	€ million
NIB/Clerical Medical	13.98	17.16	7.39
Ansbacher	0.47	0.68	17.38

These amounts were paid by account holders. No payment was made by the financial institutions involved as the liability in question properly fell on the account holders. A liability arises on financial institutions operating in Ireland where there is an obligation under Irish law to withhold tax i.e. DIRT. This obligation does not apply to offshore banks.

Substantial sums have also been received in respect of certain cases involving offshore accounts which came within the scope of the Moriarty and Flood tribunals of inquiry. These sums include payments on account of final liabilities. However, a detailed analysis of the offshore elements in these cases is not available.

While the question is directed at offshore accounts, the Deputy may be referring also in his question to the results of the bogus non-resident account investigation, which involved the use of offshore addresses, but where the account was maintained in Ireland and the account holder was in fact an Irish resident masquerading as a non-resident.

This investigation by the Revenue Commissioners involved two phases: first, the DIRT look-back audits of financial institutions which collected some €220 million from the financial institutions; second, pursuing the payment of tax liabilities which relate to funds deposited in bogus non-resident accounts, "underlying" tax. This second phase commenced with a voluntary arrangement for bogus account holders to voluntarily disclose "underlying" tax liabilities by 15 November 2001, which yielded some €227 million and is continuing with the ongoing pursuit of underlying liabilities of the remaining bogus account holders. A breakdown between tax, interest and penalties for the first phase and the initial stage of the second phase is shown in Table 2.

Table 2

Phase	TaxUnderpaid	Interest andPenalties
	€ million	€ million
DIRT Look-Back Audits	89.60	130.44
November 15 Arrangement	114.00	113.00

Some €21 million has been received since the completion of the voluntary disclosure scheme on 15 November 2001, mostly by way of payments on account of final liabilities. No analysis of that figure is available as yet but the amounts of interest and penalties are likely to be well in excess of the amount of tax. The Revenue inquiries into these cases will continue for as long as is necessary.

Further details in relation to the DIRT look-back audits, showing the amount of tax and interest and penalties paid by each financial institution, are shown in Table 3.

Table 3

Deposit-Taker/Group	Tax	Interest	Total
	€	€	€
ABN AMRO Bank N.V.	10,587	48,827	59,414
ACC Bank Plc	9,537,002	13,192,579	22,729,581
Allied Irish Banks Group	43,906,820	70,425,715	114,332,535
An Post – Post Office Savings Bank	59,069	116,619	175,688
Anglo Irish Bank Group	0	0	0
Bank of America N.T. and S.A.	0	0	0
Bank of Ireland Group	16,185,201	22,541,810	38,727,011
Bank of Scotland (Ireland) Ltd.	35,239	73,691	108,930
Banque National de Paris S.A.	0	0	0
Barclays Bank Plc	1,175	8,545	9,720
Chase Manhattan Bank Ireland Plc	0	0	0
Citibank N.A.	0	0	0
E.B.S. Building Society	1,640,326	1,921,517	3,561,843
First Active Plc.	1,552,074	1,841,901	3,393,975
GE Capital Woodchester Bank Ltd.	2,484,738	3,389,923	5,874,661
ICC Group	131,120	118,966	250,086
IIB Bank Ltd.	16,799	26,558	43,357
Irish Nationwide Building Society	2,755,429	2,882,208	5,637,637
Irish Life and Permanent Group	4,716,819	4,924,386	9,641,205
National Irish Bank Group	2,909,431	3,756,694	6,666,125
Pfizer International Bank Europe	0	0	0
Scotiabank (Ireland) Ltd.	0	0	0
TSB Bank	1,524,563	1,967,217	3,491,780
Ulster Bank Group	2,134,637	3,198,263	5,332,900
Westdeutsche Landesbank (Ireland) Plc	0	0	0
Totals	89,601,029	130,435,419	220,036,448

Question No. 175 answered with Question No. 170.