Ireland signs tax deal with Jersey and Guernsey

IRELAND HAS signed tax co-operation agreements with Jersey and Guernsey that will allow the Revenue Commissioners request banking information relevant to Irish tax investigations.

The agreements, signed earlier this week, will only apply to future investigations and cannot be used in ongoing Revenue inquiries.

The move follows the signing of a similar agreement with the Isle of Man in April last year.

The agreements cover the exchange of tax information and relief for some individuals from double taxation.

The impetus for the arrangement came from the Department of Finance which is conscious that Bank of Ireland and AIB operate in the Channel Islands.

Since 2005 jurisdictions with banking secrecy laws, such as Jersey and the Isle of Man, have collected a withholding tax on savings held in their banks by EU citizens as an alternative to revealing data about their clients.

The Exchequer received almost €3 million under this scheme in 2007 which taxes interest earned on deposit accounts held by Irish citizens.

Minister for Finance Brian Lenihan said the agreement would allow the Revenue Commissioners request information from Jersey or Guernsey relevant to an Irish tax investigation. The agreement will provide access to information on bank accounts or the beneficial ownership of companies or trusts.

While the agreement was signed on Wednesday it must be ratified and provided for in the Finance Bill, which gives effect to the Budget.

The agreement is part of a series of bilateral tax agreements between OECD member countries since 2002 as part of a bid to improve transparency and information exchange on tax.