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New Irish Revenue initiative on undisclosed Funds in Irish Bank Accounts - Deadline Sept 15th
By Paul Dillon, Tax Director at Baker Tilly Ryan Glennon
Sep 12, 2008 - 7:51:39 AM
The Irish Revenue has recently launched a new initiative whereby they are targeting people with large amounts of undeclared income or gains held in Irish Bank accounts.
Under revenue regulations there is an obligation on financial institutions in Ireland to notify Revenue of the names and addresses of all account holders who received interest on savings and deposit accounts in excess of €635 in the tax years 2005 and 2006. Revenue therefore have information regarding the amounts held on these accounts and as a result, Revenue has announced a voluntary disclosure system for undisclosed funds held in Irish financial institutions.
Revenue are specifically targeting persons who at any time during the years 2005, 2006 or 2007 held in aggregate €100,000 or more in accounts or investments. Revenue are not at this time targeting smaller amounts however it would be advisable to regularise your tax affairs if you have any concerns.
Revenue has reported that it has received more than 4,000 calls from the public about its voluntary disclosure initiative on interest earned on deposits and other investments, which expires next Monday, September 15.
From that date banks, building societies, and the Post Office will be handing over details to the Revenue, including the names and addresses of anyone who earned more than €635 in interest during 2005 or 2006.
Under this scheme, taxpayers must provide Revenue with a “notice of intention” to make a voluntary disclosure by 15 September next and make a full disclosure outlining details of all undisclosed monies together with the related tax, interest and penalties which is due by 15 January 2009.
The advantage of availing of this initiative is that there will be a significant mitigation in penalties (in some cases the penalties will be reduced from100% to 10%) and you will also be able to avoid publication in the National press.
If you have undeclared liabilities and Revenue investigate these accounts they have stated such individuals will be pursued rigorously.
Certain tax payers are excluded from the benefits of the initiative, these include taxpayers that are currently under investigation by Revenue or taxpayers who have availed of a previous disclosure to Revenue and did not disclose of the funds in question.
The format of the Declaration and calculation of tax liability.
It is important to note that Revenue will not calculate the tax liability for you and it is the responsibility of the taxpayer to make a full disclosure of the undisclosed funds together with a calculation of the tax liability and the interest and penalties.
You should declare everything previously undisclosed, not just the money invested in the undeclared bank account.
The amount due will vary in every case. It depends on how much money is undeclared and under which "tax” type the source is chargeable. In other words, whether the undeclared money relates to income from a trade or profession or from the proceeds of disposal of an asset or a gift or inheritance. The longer it has been since the monies were undeclared, the more interest will be payable.
It is important therefore that taxpayers who have undeclared liabilities regularise their affairs as soon as possible and meet the deadlines set down by the initiative as it may lead to a significant mitigation of the tax liability and avoid prosecution.
