Prompted Qualifying Disclosures

Qualifying Disclosure. Revenue Compliance Intervention. Audits and Investigations. Compliance Notification Letters

Today, 3^rd March 2017, Revenue issued eBrief 23/17, announcing the publication of its updated Code of Practice for Revenue Audit and other Compliance Interventions – February 2017.  All compliance notification letters will now advise the taxpayer of Revenue’s potential use of e-audit techniques, as part of the intervention process. This updated Code of Practice also incorporates amendments to the qualifying disclosure regime in relation to offshore matters.  These are due to come into effect on 1st  May 2017.

The main changes are as follows:

• Paragraph 2.6 states “The scope of the audit will also be set out, and will range from a single tax-head or single issue for a specific period or year to a comprehensive audit for a number of years.” In this section, Revenue’s Audit/Compliance Notification Letter will now provide more clarity as to what the tax head(s) and year(s) will be audited.

• Paragraph 3.7.1 states “In cases not involving deliberate default, if Revenue draws the attention of the taxpayer to issues not within the initial scope of the Revenue Audit, without formally extending the audit, the taxpayer will have the benefit of an ‘unprompted qualifying disclosure’ in respect of any liabilities disclosed.” Here Revenue is extending the circumstances where a taxpayer can make an unprompted qualifying disclosure. In the previous Code of Practice, if Revenue identified areas not within the scope of the audit, as outlined in the audit notification letter, but considered that they were related to the subject matter of the audit then the Taxpayer could only make a prompted qualifying disclosure.

• Paragraph 3.13 states “A notice of intention to make a qualifying disclosure will not be granted where the taxpayer has already availed of a 60 day period in respect of the same issue or period, i.e. only one 60 day period will be allowed to prepare a qualifying disclosure for the same issue or period.” This amendment was introduced to address the issue of taxpayers’ delays. The Revenue Commissioners want to make it clear that the taxpayer has only one sixty day period in which to prepare a qualifying disclosure for the relevant issue and tax period.

• Paragraph 4.10 states “Revenue Compliance Interventions can involve the copying of records or the extraction from records… The data will be deleted within six months of the date that the compliance intervention is finalised.” This section states that if Revenue copy or extract taxpayers’ information or records, as part of a compliance intervention, that this data will be deleted within a six month period from the conclusion of the intervention.

• Paragraph 6.2 increased the statutory publication threshold amount from €33,000 to €35,000. Please be aware that this figure is the accumulation of tax liabilities, statutory interest and penalties.

As with previous updates to the Code of Practice for Revenue Audit and other Compliance Interventions, if the taxpayer has received a compliance intervention notification, and the intervention has not been settled by 22^nd February 2027, the taxpayer has the option of using the terms of this Code of Practice or the previous one.

For further information, please click: https://www.revenue.ie/en/tax-professionals/documents/code-of-practice-revenue-audit-2017.pdf

What we can do for you

Did you know that it’s the Revenue Commissioners’ aim is to audit every company at least once, every five years?  We have extensive experience and expertise in dealing with all aspects of Revenue Audits, Compliance Interventions and Investigations.  For further information on minimizing and managing your tax risk, preparing qualifying tax disclosures, supporting you throughout the intervention and ensuring the best possible outcome, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Offshore Income and Gains Taxes. Qualifying Disclosure. Revenue Compliance Intervention. Revenue Audits and Investigations

With effect from 1^st May 2017, you will no longer be able to avail of the benefits from making a qualifying disclosure in relation to offshore income and gains.  From 1^st May 2017 any offshore tax defaults could result in (i) unmitigated penalties, (ii) publication on the quarterly tax defaulters’ list and (iii) possible criminal prosecution, even in situations where the taxpayer comes forward voluntarily. Therefore, if you have incurred a tax liability in relation to any offshore matter, you have until 30th April 2017 to make a voluntary disclosure to the Revenue Commissioners.  Please be aware, that according to Revenue’s FAQ, filing a notice of intention to make a disclosure will NOT provide taxpayers with an extension to this deadline.

Who is affected?

Individuals, Companies, Trustees and other persons will all be impacted.

What is meant by “offshore matters”?

1. Foreign Bank Accounts,

2. Assets held in countries outside the state,

3. Income arising from a source outside Ireland,

4. Gains arising or accruing in a territory other than Ireland,

5. Foreign property and

6. Shares held outside the state.

“Outside the state” means all countries or jurisdictions outside Ireland.

If you have received a gift or inheritance of a foreign property, you should contact your Tax Advisor to ensure you meet your compliance obligations.

For those of you who own a holiday property abroad or hold an overseas pension, this recent tax development may affect you.

Special attention should be paid if you hold a directorship of a non-Irish company and receive Director’s Fees or if you receive income from a family trust established outside the state.  You may need to make a disclosure to the Revenue Commissioners before 30^th April 2017.

What should I look out for?

On 17^th February Revenue issued its press release “Income Tax Payers Get Important Advice from Revenue.”  They subsequently sent out letters to hundreds of thousands of taxpayers inviting them to review their tax returns and consider if they need to make a qualifying disclosure.

If you have received such a letter, you should seek professional tax advice.

For further information, please click:

https://tab.ie/wp-content/uploads/2017/03/Revenue-FAQ-Qualifying-disclosure-offshore-matters-1.pdf

If you would like to make an appointment to review your offshore assets, discuss any Revenue correspondence you received in relation to this matter or to prepare a qualifying disclosure, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.