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Budget 2017 and Offshore Accounts
In his Budget speech on 11 October 2016, the Minister for Finance announced a comprehensive programme of targeted intervention against offshore tax evasion.
The announcement comes as increased data relating to offshore accounts is set to become available to the Irish Revenue Commissioners (“Revenue”) as a result of the implementation, as an early adopter, of the OECD’s Common Reporting Standard (“CRS”). The first exchange of reported information under CRS, which will see details of offshore accounts held by Irish resident customers being passed to Revenue, is scheduled to commence in September 2017.
The measures announced include:
- The denial of the opportunity, from 1 May 2017, to make a “qualifying disclosure” in relation to offshore accounts and assets. The benefits of making a qualifying disclosure include mitigation of penalties, non-publication as a tax defaulter, and protection from criminal prosecution in relation to the tax default.
- The introduction of a strict liability offence for failure to return details of offshore accounts or other assets.
- Increased personnel and improved information technology infrastructure for Revenue to analyse data received and confront non-compliance.
Opportunity for Disclosure
Published Revenue material indicates that statutory disclosure opportunities provided by Revenue in 2004 and 2009, as well as information made available by financial institutions to Revenue pursuant to a number of High Court Orders, preclude an individual from availing of the qualifying disclosure regime in seeking to regularise their tax affairs.
However, this has not been our experience in practice and this is borne out by the Budget announcement.
The explicit reference to a 1 May 2017 deadline in the Budget strongly indicates that there is still one final opportunity for those with offshore accounts which may not be tax compliant, to approach Revenue and achieve a settlement which benefits from the qualifying disclosure regime.
With this deadline set by Revenue, the imposition of a strict liability offence and the first compliance date for CRS fast approaching, now is the time for recalcitrant taxpayers to seek legal advice and address these issues.