Tax Accountants Dublin

New Code of Practice for Revenue Compliance Interventions


The Revenue Commissioners published a new Code of Practice for Revenue Compliance Interventions today which will be effective from 1st May 2022 and will apply to all compliance interventions notified on/after that date.  The revised Code applies to all taxes and duties, with the exception of Customs.


The revised Code reflects Revenue’s new Compliance Intervention Framework and the key changes include:

  1. A three tier designation of Revenue Interventions and

  2. The introduction of Risk Review categories of Intervention.



Level 1

Level 1 Interventions are aimed at assisting taxpayers to bring their tax affairs in order voluntarily.  They are designed to support compliance by reminding taxpayers of their obligations. They also provide them with the opportunity to correct errors without the need for a more in-depth Revenue intervention. These include the following:

  1. Self-reviews

  2. Profile interviews

  3. Bulk issue non-filer reminders

  4. Actions that fall under the Co-operative Compliance Framework.



The expected outcomes of Level 1 Interventions:

  1. Liability under relevant tax head(s).

  2. Statutory Interest

  3. Reduced penalties. In situations where self correction is an option, no penalties should arise.

  4. No Prosecution.

  5. No Publication.




In Summary:

  • Level 1 interventions can only occur where the Revenue Commissioners have not already engaged in any detailed examination, review, audit or investigation of the matters under consideration.

  • Examples include VAT verification check letters requesting backup documentation to support refund claims, reminder notifications in relation to outstanding tax returns, questionnaires for R&D Tax Credit claims, requests to self-review on specific issues, etc.

  • A Level 1 Intervention allows for an unprompted qualifying disclosure.

  • Unprompted qualifying disclosures cannot be made at any level other than Level 1.

  • The definition of a Profile Interview has changed in the new Code. A Profile Interview will now be used by Revenue to familiarise itself with a specific taxpayer.  Previously it was used to assess a set of taxpayer risks to ascertain whether or not a Revenue audit was required.

  • If the Revenue Commissioners identify a compliance risk during a Profile Interview, they may initiate a Level 2 or Level 3 intervention.

  • A Level 1 Compliance Intervention allows for (i) self corrections and (ii) unprompted qualifying disclosure.

  • When making an unprompted qualifying disclosure, it is essential to disclose the tax defaults for the tax heads and the tax periods which are the subject of the disclosure. To be completely compliant, the taxpayer must also include all previously undisclosed tax defaults in the ‘deliberate default’ category under any tax head and/or any tax period.



Important Change

According to the new Code, self-corrections can continue to be made the taxpayer is within the relevant time limits

From 1st May 2022 any such self-corrections must be made in writing.

The submission of an amended return on ROS will no be longer sufficient to qualify as a written notification.

Therefore, to qualify as a self correction, a written notification must be provided as well as any amendment made on ROS.





Level 2

One of the more fundamental changes to the revised Code is the introduction of the ‘Risk Review’ as a Level 2 Intervention. Level 2 interventions are used by Revenue to confront compliance risks ranging from the examination of a single issue within a Tax Return to a full and comprehensive Revenue Audit.  An ‘unprompted qualifying disclosure’ will not be available to a taxpayer who receives notification of a Risk Review in respect of the specified tax head and tax period.  Taxpayers will, however, have the option to make a prompted qualifying disclosure when notified of a Level 2 intervention.

There are two types of Level 2 Interventions:

  1. Risk Reviews

  2. Audits





Level 2 Interventions – Risk Review

  • A Risk Review is generally a desk based intervention which focuses on a particular issue or issues contained in a tax return or a risk identified by Revenue’s own system.

  • Unlike level 1 interventions, there is no option for a taxpayer to make a self-correction or an unpromoted qualifying disclosure once they have been notified of a level 2 compliance intervention.

  • A written notification will be issued to the taxpayer.

  • The notice will specify the scope of the tax review, outlining which information is to be provided within a twenty eight day period.

  • The notification will also clarify whether the intervention is a risk review or an audit.

  • The review will take place twenty eight days from the date of the notification.

  • Generally, Risk Reviews will be carried out by correspondence.

  • Taxpayers will have twenty one days in which to notify Revenue if they intend to make a prompted qualifying disclosure.

  • A prompted qualifying disclosure can be made within twenty eight days of a notification of a level 2 intervention, with the possibility of requesting an additional sixty days.

  • In circumstances where a prompted qualifying disclosure is made, it must be made along with the relevant tax and statutory interest paid, before the expiry of the twenty eight day period.

  • The prompted qualifying disclosure must include all underpayments in respect of that particular tax head for the period in question and not just the particular issue which is the subject of the Risk Review. If the taxpayer fails to disclose any underpayments at this point then it is likely that higher penalties could ensue along with an increased risk of publication on Revenue’s Tax Defaulters List.

  • A prompted qualifying disclosure may allow the taxpayer the opportunity to mitigate penalties, avoid prosecution and/or avoid publication on the tax defaulters’ list.

  • Failure to respond to the Risk Review Notification may result in an on-site visit by Revenue or a full Revenue Audit.




Level 2 Interventions – Revenue Audit

A “Revenue Audit” is an examination of the compliance of a taxpayer.  It focuses on the accuracy of specific tax returns, statements, claims, declarations, etc. Broadly speaking, the operation of a Revenue Audit will remain the same under the revised Code.  An audit will be initiated where there is a greater level of perceived risk.  Also, please keep in mind that an audit may be extended to include additional tax risks depending on information discovered by Revenue during the audit process.

The main stages in a typical Revenue audit are unchanged under the new Code and can be summarised as follows:

  1. The taxpayer receives a Notification Letter which confirms the type of compliance intervention to be undertaken as well as the tax head(s) and period(s) covered. The notice also contains the audit commencement date and location in addition to the books and records to be made available for inspection.

  2. The audit will commence twenty eight days after the date of the notification.

  3. It is possible for businesses to request an alternative date in circumstances where the commencement date is not feasible for them.

  4. A pre-audit meeting can be carried out, where necessary, to ascertain the nature and availability of electronic records.

  5. It is possible to make a prompted qualifying disclosure before the start of the Audit. In order to make such a disclosure, tax and statutory interest must be paid in full.  A penalty does not need to be included.  The taxpayer must sign a declaration that the disclosure is complete and correct.

  6. Taxpayers may request an additional sixty days in order to prepare a prompted qualifying disclosure. This must be done within twenty one days of the date of the Audit Notification.

  7. Opening meeting – At the start of this meeting, the Auditor explains the purpose of the audit and indicates how long it should take. At this point, the Taxpayer has the opportunity to make a prompted qualifying disclosure.  This meeting provides the taxpayer with the opportunity to demonstrate to Revenue the tax controls in place. The Revenue auditor will examine the books and records as well as the prompted qualifying disclosure, raise queries and interview the taxpayer.  The information and explanations provided by the taxpayer will define the focus areas of the audit as well as influencing its outcome.

  8. Revenue will meet the Taxpayer to outline the audit findings.

  9. If the tax return is correct, the taxpayer will be informed as soon as there is certainty. If, however, the return requires amendment, the Auditor will discuss this with the Taxpayer and provide written clarification.

  10. At the close of the audit there will be a final meeting to agree on the total settlement when the taxpayer should pay the required amount to the Auditor.

  11. Following on from the audit, assessments may be raised or actions carried out to recover additional or disputed tax liabilities, where necessary.



Level 3 Intervention

Level 3 interventions take the form of investigations. These would generally be focused on suspected tax fraud and evasion.  A ‘Revenue Investigation’ is an examination of a taxpayer’s affairs where Revenue believes that serious tax or duty evasion may have occurred.  As the Revenue investigation may lead to a criminal prosecution, it is always recommended to seek expert professional advice and assistance in such situations.

A taxpayer is not entitled to make a qualifying disclosure from the date of commencement of the investigation, however, a taxpayer can seek to mitigate penalties by cooperating fully with a level 3 intervention.

Taxpayers will generally be notified of a Level 3 intervention in writing.  However, in certain cases Revenue may carry out an unannounced visit or may carry out investigations without notifying the taxpayer in writing.

Just to reiterate, once an investigation is initiated, the taxpayer cannot make a qualifying disclosure in relation to the matters under investigation.






The main changes in the new Code of Practice for Revenue Compliance Interventions are:

  1. The new Risk Review which is classed in the same category as a Revenue Audit. Once a taxpayer is notified of a Risk Review, the option of making an unprompted qualifying disclosure is removed.  This means the taxpayer will be subject to increased penalties and possible publication on the Revenue’s Tax Defaulters’ list.

  2. A Risk Review generally requires clarification of a specific tax related issue, however, in order for a prompted disclosure to qualify, the disclosure must cover all tax defaults in relation to that particular tax head and the period(s) outlined in the notification. If, however, the default is considered to be in the deliberate default category, the disclosure must cover all tax heads and all tax periods.

  3. There is a 28 day period between the date of the Notification and the commencement of the Risk Review or Audit.

  4. Under the new Code, where the tax underpayment or an incorrectly claimed refund is less than €50,000, publication on the Revenue’s Tax Defaulters’ list will not arise. This increased threshold relates to the tax liability only and does not include interest and/or penalties.

  5. Under the new Code, the exclusion from mitigation of penalties in relation to disclosures pertaining to offshore matters has been removed. This means the taxpayer can now include tax defaults relating to offshore matters in qualifying disclosures and benefit from mitigated penalties.




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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.




On 2nd September 2013, Vodafone Group Plc. announced that it was disposing of its 45% interest in Verizon Wireless to Verizon Communications Inc.

At the same time, it also announced its intention to carry out a “Return of Value” to its shareholders, of which there are almost 400,000 in Ireland.  Many of these shareholders had acquired Vodafone shares in exchange for their Eircom shares in 2001.  The “Return of Value” would be partly in cash and partly in Verizon consideration shares.

On 14th May 2014 the Irish Revenue Authorities issued a comprehensive Tax Briefing outlining the tax treatment of the Vodafone Return of Value to its shareholders which provides comprehensive guidance on the calculation of the base cost for Capital Gains Tax purposes.


 In what form will Vodafone return this value to the shareholders?

 Either by the issue of:

  1. B Shares (The Capital Option) or
  2. C Shares (The Income Option)


 What does that mean to the shareholder?

  1. If the shareholder opts for B Shares or the Capital Option then the return of value will be liable under the Capital Gains Tax rules.  The C.G.T. rate is currently 33%.
  2. If the shareholder opts for the C Shares or the Income Option then the return of value will be subject to the Irish Income Tax rules.  In other words the shareholder will be treated as having received a dividend and will be taxed as with previous Vodafone dividends.

What does the Shareholder actually get?

  1. 6 new Vodafone Ordinary shares for every 11 Vodafone ordinary shares held.
  2. 0.0263001 Verizon Shares for every Vodafone share
  3. A cash amount of €0.3585437 for every Vodafone share



 What about the shareholders who exchanged their Eircom shares for Vodafone Shares in 2001?

 These shareholders will NOT have a Capital Gains Tax liability.

Instead they will have a capital loss to offset against other chargeable gains arising in the current tax year or if unused they can be carried forward against future capital gains.


No Capital Gains Tax charge will arise for these shareholders in the following situations:

  1. Where the shareholder opted for the capital option and the sale of Verizon shares.
  2. Where the shareholder opted for the capital option and held onto the Verizon shares.

What is the base cost of the Vodafone Ordinary Shares?

The base cost for those Vodafone shares acquired in exchange for Eircom shares in 2001 is €4.46 per share.


Where in legislation are the apportioning rules?

 Section 584(6) Taxes Consolidated Acts 1997 outlines the rule for calculating the apportionment of the original holding between the three elements of the new holding i.e. the cash element, the new Vodafone ordinary shares and the Verizon shares.


What about future disposals of these shares?

  • €4.58 will be the base cost per share of the new Vodafone ordinary shares by former Eircom shareholders when they dispose of these shares in the future.  (This figure could be subject to future adjustments)
  • €53.85 will be the base cost per share of the Verizon shares by former Eircom shareholders when they dispose of these shares in the future.  (This figure could be subject to future adjustments)


What is the Income Tax treatment for those opting for C Shares?

Individuals who opted for the C Shares have received a dividend from Vodafone which consisted of two elements:

  1. A cash amount and
  2. Shares in Verizon

The shareholder should include both amounts in his/her Income Tax Return i.e. the cash actually received and the market value of the Verizon Consideration Share Entitlement received.  He/she must then pay the Income Tax arising on this dividend.


How is the tax on these dividends paid?

  • Employees or individuals who pay tax through the PAYE system and where their non-PAYE income does not exceed €3,174 can have any tax arising on these dividends collected and offset against their tax credits.
  • Self employed individuals must file a Form 11 in which income from all sources must be included and correct taxes paid on or before the self assessment deadline.
  • Employees or individuals who pay tax through the PAYE system and where their non-PAYE exceeds €3,174 must complete a Form 11 and include the amount of Vodafone income received.  They must comply with the pay and file requirements of the self assessment system.

Are there any exemptions?

Individuals aged 65 years and over are entitled to claim an exemption from Income Tax if their total income i.e. income combined from all sources including Vodafone and Verizon dividends is


  • Less than €18,000 in the case of a single person, widowed individual or surviving civil partner or
  • Less than €36,000 in the case of a married couple or civil partnership.

Will there be Dividend Withholding Tax on the Verizon Shares?

Dividends paid to shareholders of Verizon shares will, in general, be subject to US withholding tax, currently 30% of the gross dividend amount.

Irish resident shareholders can make a claim to the US Tax Authorities to be entitled to dividend withholding tax at the reduced rate of 15%.

This claim can be made by completing a Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and forwarding it to Computershare as stated on the form.


The Irish resident shareholder will be entitled to a credit for tax withheld against Income tax or Corporation tax on the dividends received.


 The credit will be the lower of:

  1. The Irish effective tax rate on the dividends or
  2. The rate provided by the U.S./Ireland Double Taxation Treaty




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.