The Revenue Commissioners are investigating the tax affairs of Irish clients of HSBC bank in Switzerland who may have been trying to hide money from tax authorities at home.
An initial investigation into 33 account-holders with addresses in Ireland has resulted in settlements with 16 individuals worth more than €4 million.
One case is being prosecuted, while three others are being examined. In addition, Revenue has obtained new details from High Court orders of Irish residents transferring money to and from tax havens such as the Isle of Man, Guernsey and Liechtenstein. This has resulted in the uncovering of €12.8 million in unpaid taxes. Many of these customers were identified through use of offshore debit and credit cards in the State. Irish authorities are in contact with other tax authorities over property deals by Irish residents in foreign jurisdictions.
Freedom of Information
The details are contained in internal Revenue briefing documents prepared earlier this year and released to The Irish Times under the Freedom of Information Act.
The details of the Swiss account-holders came to light as a result of an insider at HSBC in Switzerland who sold details of the bank's clients in Geneva to tax authorities in France.
The Revenue received a disc with information on Irish customers from French authorities last year.
Separately, the Revenue has asked the UK's tax authority for details of Irish clients of the HSBC bank in Jersey. Up to 80 account-holders may have Irish addresses. In a statement HSBC said they required all clients "to be tax-compliant and transparent about their tax affairs" and they ceased relationships where the client is not.
In all, the tax authorities in the State have collected just over €30 million from offshore investigations and trusts aimed at hiding undeclared funds.
A probe into the use of trusts has uncovered two elaborate cash-extraction schemes which could have been used to distribute funds worth more than €100 million tax-free.
Other records show concern at home among the Revenue at the practices of banks and multinationals in cutting their corporation tax bills. Revenue is targeting aggressive “loss-buying”, which allows firms to trim tax liability by carrying forward losses indefinitely. Several billion euro in corporation tax payments could be at risk.
There is evidence some multinationals and large corporations are cutting their bills through improper use of R&D tax credits. These are aimed at incentivising the development of high-quality research, and allow companies to cut corporation tax liabilities. But audits show officials consider these to be a high risk and are planning tighter oversight.
'Abusive transfer pricing'
Records also show officials are prepared to target any multinational firms engaged in "abusive transfer pricing".
Transfer pricing involves different arms of multinationals selling intellectual property to other arms. It is used by many to cut tax liability.