I am advised by Revenue that while a matter is subject to an appeal to the Tax Appeals Commission, the collection of the amount of tax that is in dispute is suspended until the appeal is determined by the Tax Appeals Commission. Where the Tax Appeals Commission find in favour of Revenue, and the tax is found to be due and payable, the original due date in respect of that tax continues to apply for interest purposes. Appellants can make protective payments to Revenue in advance of the determination to minimise their potential exposure to interest charges.
Interest payable on outstanding income tax, corporation tax and capital gains tax in respect of a given period of late payment is set out in section 1080 of the Taxes Consolidation Act 1997 (TCA 1997). The current interest rate on overdue tax in respect of income tax, corporation tax, capital gains tax, gift and inheritance tax is currently 0.0219% per day which equates to an annual rate of 7.92%. The current interest rate on overdue tax in respect of taxes such as VAT and PAYE is currently 0.0274% per day, which equates to an annual rate of 10%, as set out in section 114 of the Value Added Tax Consolidation Act 2010 (VATCA 2010) and section 991 of the TCA 1997.
Where the Tax Appeals Commission finds in favour of the appellant there may be an overpayment of tax to be repaid. Section 865A of TCA 1997 states that where a repayment of direct taxes arises to a taxpayer for a chargeable period due to a mistaken assumption by Revenue in applying tax legislation, interest is payable on the amount overpaid for each day after the end of the period in question or, if later, the date on which the tax was paid, until the date on which the repayment is made. Interest is payable at the rate of 0.011% per day, which equates to an annual rate of 4.015%. Section 105 of the VATCA 2010 provides for the same rate in respect of VAT refunds as a result of a mistaken assumption by Revenue. Interest is not payable in these circumstances where the overpaid tax is offset against outstanding tax and/or returns are outstanding or where the amount of interest is less than €10.