Monday 13 March 2017

Revenue is has sent out letters to almost 500,000 taxpayers ahead of a deadline for disclosing assets held offshore.

Under recently enhanced co-operation designed to clamp down on international tax evasion, the Revenue has access to records held on Irish-based taxpayers by tax authorities in other countries.

And while the primary focus is to detect and/or deter large-scale tax evaders, the new rules could impact anyone with a bank account in another jurisdiction or an inherited property that is being rented out for part of the year.

As per the Revenue website “offshore” does not mean assets or funds in exotic locations as they would have been know before. “Offshore” includes any income or assets held outside Ireland for example:

• An account held or situated in a country or territory other than the state. 

• Income or gains arising from a source, or accruing in a country or territory other than the state

• Property situated in a country or territory other than the state.

Taxpayers will no longer be able to file a “qualifying disclosure” – a voluntary disclosure of a tax liability or omission in a previous filing – in relation to property, funds or accounts held abroad after April 30th under new rules introduced in the Finance Act. Such a disclosure generally qualifies where someone contacts Revenue with details of the tax owed before Revenue pursues them.

A qualifying disclosure allows errant taxpayers to avail of lower penalties on back tax owed as well as avoiding publication of their details in the quarterly tax defaulters’ list and possible criminal prosecution.

However, the 2016 Finance Act withdraws that option for people who have failed to disclose offshore assets before 30th of April. Revenue argues that “concealment of foreign income and assets” is “deliberate behavior ” – the most serious category of tax default – as “it is difficult to see how a taxpayer might lodge undeclared money in a foreign account purely through carelessness, rather than with the intent to evade tax”.

If you have any questions please don’t hesitate to contact this office.