Dáil Éireann Debate, Wednesday - 1 February 2012
12 Deputy Clare Daly asked the Minister for Finance if he will explain the circumstances through which section 86 of the Finance Act 1989 which has been found by the High Court and Supreme Court to enable tax evasion to be highly artificial of mind numbing complexity involving more than 40 separate steps and devised for the sole purpose of avoiding tax was introduced; and if he is proposing to abolish this scheme. [5608/12]
Amharc ar fhreagraSection 86 of the Finance Act 1989 (now Section 811 of the Taxes Consolidation Act 1997) is not a scheme, it is the general anti avoidance rule in tax law introduced to defeat transactions which are undertaken primarily for the purposes of avoiding tax. Where a transaction is challenged by the Revenue Commissioners under this section and the Courts uphold the challenge, the transaction is redefined to ensure that no tax is avoided. I assume that the Deputy is referring to the recent Supreme Court decision in the Revenue Commissioners v. O’Flynn Construction case. I am informed by the Revenue Commissioners that in this case the Revenue Commissioners used Section 86 of the Finance Act 1989 (now Section 811 of the Taxes Consolidation Act 1997) to challenge a scheme entered into by the taxpayer and the Supreme Court upheld the Revenue Commissioners challenge.
