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By Ben Stupples
Ireland’s tax authority collected 7.7 million euros ($8.4 million) last year from offshore assets amid its aggressive stance toward tax evasion, according to the Irish Revenue’s 2016 annual report.
Out of the total, 3.8 million euros came from tax payments, with interest payments and penalties making up the remaining 3.9 million euros, according to the Revenue’s April 27 report for the calendar year. The total figure marks a 6.1 percent fall from 2015, according to data compiled by Bloomberg BNA.
“Tackling tax evasion is always high on our agenda,” the Revenue said in the report. “The Panama Papers were a reminder that offshore evasion has not gone away and we have been active both nationally and internationally in confronting and challenging such evasion,” it added.
The results from the Revenue’s investigations into offshore assets comes as the tax authority cracks down on tax evasion. Taxpayers originally had until April 30 to divulge undisclosed offshore income to the Revenue or face stiff penalties of up to 100 percent of the tax due and criminal prosecution. As the deadline falls on a bank holiday weekend, however, the Revenue has extended it to May 4.
Aisling Donohue, a tax partner at Dublin-based tax and business advisory firm mgpartners, told Bloomberg BNA in an April 27 telephone interview that she had received “three enquiries” about disclosing offshore income after the Revenue’s April 27 announcement to extend the deadline.
While overseas assets are commonly associated with high-net-worth individuals, the Irish banking crisis of the 1970s—when bankers went on strike on three occasions in protest against regulations imposed on them—caused a high number of the country’s citizens to set up overseas bank accounts.
As a result, the undeclared income that Irish taxpayers are looking to disclose could be anything “between 5 euros and 5,000 euros,” Donohue added. In the 1970s, “people moved outside Ireland, and then by the 1980s almost everybody who was anybody had some of their assets held offshore.”
The Revenue’s 2016 figures also come as it prepares to receive taxpayer details following global moves, led by the Organization for Economic Cooperation and Development and Group of 20 countries, to boost tax transparency and compliance.
In September, as an early adopter, Ireland will be one of the first countries to receive taxpayer details from its financial entities—such as Allied Irish Banks Plc—and Irish branches of foreign entities on an automatic basis under the OECD-designed common reporting standard.
“In an increasingly globalised economy, this is a significant development that will enhance international tax transparency,” the Revenue said in its annual report on the CRS and DAC2, the European Union’s CRS-based directive for compulsory and automated exchange of information.
In an analysis of Ireland’s corporation tax receipts published alongside the Revenue’s annual report, figures revealed that foreign multinational companies account for around 80 percent of tax receipts from companies. The analysis follows the European Commission’s verdict last year that U.S.-based Apple Inc., which has its European headquarters in Cork, owes Ireland a total of 13 billion euros in unpaid taxes.
In an April 27 emailed statement, a Revenue spokeswoman told Bloomberg BNA that the yield from the tax authority’s investigations varies each year due to “timing, and the finalisation of cases from older legacy investigations.”
The CRS and DAC2 will allow the Revenue “to identify potential tax evasion and avoidance, and to drive a compliance programme for cases identified by Revenue’s risk assessment and profiling tools,” she added.
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