Haul of €80 million shows wealth that is hidden offshore

17 September 2017

Labour spokesperson on Finance Joan Burton has said that tax avoidance overseas by Ireland’s wealthy is well and truly alive following revelations that €79 million has been raised from a tax amnesty in May. The figures were revealed from over 2,700 disclosures following Dáil Questions tabled by Deputy Burton.

Deputy Burton said:

“The revelation that nearly €80 million has been raised from over 2,700 disclosures in a recent amnesty for funds held overseas shows that the level of avoidance by the wealthy in Ireland is well and truly alive.

“For some time I have been calling for a Standing Commission on Taxation. Its purpose would be to continually examine our tax code and identify the loopholes, and measures required to ensure all those who should be paying tax are doing so.

“The amnesty in May, for those with funds overseas was projected in last year’s Budget to raise €30 million. The fact that nearly three times that has come in shows the level of avoidance in place by those with wealth.

“It is time for the Minister for Finance now to act on my suggestion and ensure that the Revenue Commissioners have the back up they need to root out the loopholes, reliefs and avoidance structures being used to keep taxes unpaid.”

ENDS

Notes to Editors – Questions tabled and answers recieved:

QUESTION NOS: 204,207,208,212 DÁIL QUESTIONS addressed to the Minister for Finance (Deputy Paschal Donohoe)
by Deputy Joan Burton for WRITTEN ANSWER on 11/09/2017

* To ask the Minister for Finance the amount raised by the Revenue Commissioners in the clampdown on offshore bank accounts earlier in 2017; the number of persons involved; and if he will make a statement on the matter.

* To ask the Minister for Finance the number of tax payers that availed of the provisions of section 56 of the Finance Act 2016, by county, in tabular form; and the amount of tax, interest and penalties received by the Revenue Commissioners.

* To ask the Minister for Finance further to section 56 of the Finance Act 2016, the number of criminal prosecutions likely to arise from the failure by taxpayers to bring their affairs up to date by 1 May; if he will allocate additional resources to the Revenue Commissioners to ensure that all those that have failed to bring their affairs up to date are prosecuted; and if he will make a statement on the matter.

* To ask the Minister for Finance the tax, interest and penalties received by the Revenue Commissioners arising from the enactment of section 56 of the Finance Act 2016, by the source of income and or asset previously undeclared; if he will provide an analysis of the number of defaulters by income source that provided declarations, in tabular form; and if he will make a statement on the matter.

REPLY.

In his Financial Statement to the House on 11 October 2016, Minister Noonan indicated that he would act to restrict the opportunity for tax defaulters with outstanding tax liabilities relating to offshore matters to avail of the voluntary disclosure regime. In line with this undertaking, section 56 of the Finance Act 2016 provided that, as and from 1 May 2017, the making of a qualifying disclosure is no longer permitted where the tax liabilities involved relate to offshore matters.

The period during which a qualifying disclosure could be made to Revenue in relation to offshore matters ended on 4 May 2017. Disclosures received are still being processed and final data will be available shortly. I am advised by Revenue that the number of disclosures exceeds 2,700, with a declared value of more than €79 million. I understand also that the disclosures relate to a range of offshore matters, including foreign sources of employment –related income, foreign pensions, income from overseas property, offshore bank accounts, offshore trusts and offshore funds. A breakdown between tax, interest and penalties of disclosures to date is as follows:

Tax: €48.5 million

Interest: €24.5 million

Penalties: € 6.0 million

The following table provides an analysis of the previously undisclosed income sources and assets that were included in the qualifying disclosures received

Source Percent
Pension 16%
Bank Account 17%
Shares 20%
Property 29%
Offshore Fund 4%
Trust 1%
Earned Income 3%
Inheritance 1%
Multiple 4%
Unspecified 5%

I am advised by Revenue, that a full analysis of disclosures received by county is not currently available, this analysis will be available once all disclosures have been finalised.

For those who have tax liabilities relating to offshore matters and who did not act by the deadline of 4 May 2017 to address them, they now face the prospect of substantially higher penalties, publication in Revenue’s Quarterly List of Tax Defaulters and possible prosecution.

The international environment is changing, with closer cooperation and information-sharing between tax authorities worldwide aimed at identifying those who seek to hide their profits or gains offshore. Revenue is at the forefront of international developments for Automatic Exchange of Information (AEOI), which include the OECD’s Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA) initiative. Data received under FATCA is currently being examined and it is expected that enquiry letters will be issued later this year to relevant taxpayers, and data under CRS is not expected until 30 September 2017. These initiatives will provide Revenue with considerable amounts of data about offshore accounts, structures and assets, and Revenue has advised me that they are committed to making full and effective use of this information to pursue rigorously anyone who attempts to use such means to evade their tax obligations. It is not possible at this point to estimate the number of prosecutions likely to arise from Revenue’s enquiries relating to data received under AEOI. However, I am advised that cases will be investigated with a view to prosecution where the facts and circumstances warrant such a course of action.

I will continue to fully support Revenue in relation to its pursuit of non-compliant taxpayers and will ensure that they have all the necessary resources required to achieve this objective.

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