Dáil Éireann Debate, Tuesday - 29 May 2018
198. Deputy Joan Burton asked the Minister for Finance the number of companies opting to be treated under section 110 of the Taxes Consolidation Act 1997 which have failed to submit accounts to the Revenue Commissioners and have been prosecuted for failing to do so in each of the years 2012 to 2017; and if he will make a statement on the matter. [23485/18]
Amharc ar fhreagra199. Deputy Joan Burton asked the Minister for Finance the number of meetings between the Revenue Commissioners and the Office of Corporate Enforcement regarding the substantial number of companies opting to be taxed under section 110 of the Taxes Consolidation Act 1997 which have failed to submit accounts to either the Revenue Commissioners or the Company Registration Office; and if he will make a statement on the matter. [23486/18]
Amharc ar fhreagraI propose to take Questions Nos. 198 and 199 together.
I am advised by Revenue that the number of companies that have notified Revenue that they are “qualifying companies” for the purposes of section 110 Taxes Consolidation Act (TCA), 1997 and have not submitted Financial Statements by 28 May 2018 is set out in the table:
|
Year |
Number of Corporation Tax returns filed |
Financial Statements not filed |
% |
|
2016 |
2,347 |
78 |
3.32% |
|
2015 |
2,145 |
29 |
1.35% |
|
2014 |
1,891 |
164 |
8.67% |
Section 884 of the TCA 1997 was amended by Finance Act 2012 to extend the definition of a Corporation Tax return to encompass financial statements. This, coupled with the existing e-filing legislation, establishes a statutory basis for the mandatory submission of Financial Statements as part of the tax return. Failure to submit the Financial Statements as part of the return results in the filing of an incorrect return.
The obligation to file Financial Statements applied to section 110 companies for accounting periods ending on, or after, 31 July 2013. Typically, section 110s companies have a 31 December year end and, for those companies, the first returns impacted were due to be filed no later than September 2014.
I am advised by Revenue that section 110 companies are often used for a specific transaction or set of transactions and tend to be liquidated once the transaction or set of transactions is complete. Companies in liquidation may not be required to file financial statements. Further information is available at Revenue.ie (www.revenue.ie/en/online-services/support/documents/ixbrl/ixbrl-faqs.pdf).
There have been no criminal prosecutions of section 110 companies for failure to file Financial Statement. I am advised by Revenue that generally speaking the sanction that is applied in such circumstances is the imposition of a surcharge for the late or non-filing of a tax return, including Financial Statements under section 1084 TCA 1997. As at 28 May 2018 surcharges for late filing of Financial Statements have been applied to the following number of cases:
|
Year (Corporation Tax return filed) |
Cases with Surcharge |
|
2016 |
46 |
|
2015 |
62 |
|
2014 |
59 |
I am advised by Revenue that its responsibilities in this area relate to ensuring compliance with the conditions set out in section 110 of the Taxes Consolidation Act (TCA) 1997 and overall tax and duty compliance. I am advised by Revenue that there have been no meetings with the Office of the Director of Corporate Enforcement in this regard.
