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Ireland To Amend Offshore Disclosure Rules

by Jason Gorringe, Lowtax.net, London
21 October, 2016

The Irish Government is to amend its voluntary disclosure rules, to prevent individuals from benefiting from lower penalty rates where the disclosure relates to "offshore matters."

The measure is included in Finance Bill 2016. If it is passed, from May 1, 2017, taxpayers will no longer be able to obtain the benefits of a "qualifying disclosure" if matters included in the disclosure relate directly or indirectly to: an account held or situated in a country or territory other than Ireland; income or gains arriving from a source, or accruing, in a country or territory other than Ireland; or property situated in a country or territory other than Ireland.

In addition, where there are liabilities both arising in Ireland and relating to offshore matters, a qualifying disclosure will be unavailable in respect of all of those liabilities, except in limited circumstances.

A "qualifying disclosure" is a type of voluntary disclosure. A taxpayer can make a qualifying disclosure by freely disclosing a tax default to the Irish Revenue, as opposed to Revenue discovering the default through audit or investigation. Under the current rules, those eligible for a qualifying disclosure face substantially reduced penalties for the underpaid tax, are not included in the quarterly list of tax defaulters, and are not subject to investigation with a view to criminal prosecution by Revenue.

Revenue said that the reforms will mean that taxpayers with liabilities involving "offshore matters" could be liable to higher penalty rates and subject to criminal prosecution, and that the settlement could be published in the defaulters' list.

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