Ireland Consults On Aggressive Tax Planning Disclosures

by Jason Gorringe, Tax-News.com, London

21 June 2010

The Irish Revenue Commissioners on June 17 published a consultation document and draft regulations relating to the Mandatory Disclosure of Certain Transactions legislation introduced in section 149 of the Finance Act 2010.

The legislation requires the promoters of tax schemes that have certain characteristics to disclose them to the Revenue Commissioners shortly after they are first marketed or made available for use. The consultation follows on a commitment to that effect given by the Minister for Finance during the Finance Bill 2010 debate on the legislation. The consultation period is to run until September 15, 2010.

Also published as part of the consultation are draft guidance notes that provide a detailed commentary on the legislation and the draft regulations and set out how the disclosure regime is intended to operate in practice, along with draft forms for use in making disclosures.

The primary purpose of the disclosure regime is to create an early warning system for the Revenue Commissioners of tax schemes that may be potentially damaging to tax revenues. By obtaining information on tax avoidance schemes at an early stage before a loss of tax revenue has become apparent, the government can decide, if appropriate, to close them down before significant damage is done.

The new disclosure rules will not impact on day-to-day tax advice or on ordinary tax planning that uses standard statutory exemptions and reliefs as intended by the legislature.

The consultation process will give tax practitioners and advisers, who may be affected, and other interested parties an opportunity to comment on the new disclosure rules with a view to ensuring that the new approach is effective in terms of the problems it seeks to address. The Revenue said it aims to have final Regulations in place in the Autumn.

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