Offshore assets: deadline nears for tax crackdown
Many will not see themselves fitting the stereotype of evaders
The Revenue collected €7.7 million last year from taxpayers who were using offshore accounts. It is the latest part of a campaign that has raised €2.8 billion to date and has put the spotlight on 35,000 taxpayers. But those figures are likely to get substantially higher. The Revenue has underlined its determination to crack down, after a deadline this Thursday, on anyone hiding money or other assets abroad. Under new measures announced in Budget 2017, taxpayers will no longer be allowed to avail of voluntary or “qualifying” disclosure in relation to offshore tax .
The impact of this change can be substantial. Under qualifying disclosure, penalties are limited to 10 per cent of the tax outstanding. From Friday, those penalties can jump to as much as 100 per cent. Depending on the amount, people may also be named in the quarterly list of tax defaulters and may face criminal prosecution.
In future, hiding assets and income abroad will be considered a deliberate act of tax evasion and not simply a careless mistake
The harder line from Revenue is part of a global clampdown following disclosures by the International Consortium of Investigative Journalists (ICIJ) of cases of widespread evasion.
In future, hiding assets and income abroad will be considered a deliberate act of tax evasion and not simply a careless mistake. And it is not only “deliberate” evaders who face getting caught in the net. Many people have lived and worked abroad for years before returning to Ireland. Others are moving here from their home countries. Both categories will have set up bank accounts, invested in funds, bought property that is now rented out, or even established pensions that are now being paid. Possibly unwittingly, all face potentially significant bills.
Two factors suggest this Revenue campaign may succeed. First, as a result of the ICIJ disclosures, more than 100 countries – including Ireland – have signed up to new OECD-brokered common reporting standards under which they will automatically exchange information identifying taxpayers to their “home” tax authorities. The European Union too has a further set of rules covering an even wider range of information that is shared between member states. Second, advances in technology, especially in data mining, allow tax authorities to search their files more effectively for details that can tie particular income, accounts and property to people living in other countries.
Many will not see themselves fitting the stereotype of evaders. But under the new rules, the facts say otherwise
Under the OECD rules, the information is only becoming available this year and, unveiling Revenue’s annual report last week, chairman Niall Cody said analysing the data received will be a focus for the organisation in 2017. He warned that taxpayers will face “the full extent of the law to enforce compliance in this area”.
Many will not see themselves fitting the stereotype of evaders. But under the new rules, the facts say otherwise. The balance is, rightly, tipping in favour of compliance.