Irish Finance Minister Comments On New Disclosure Initiative

by Amanda Banks, for LawAndTax-News.com, London

29 May 2008

Ireland's Minister for Finance, Brian Lenihan, has this week commented on the Revenue Commission's recent announcement of a voluntary disclosure initiative for large undisclosed funds held in accounts in Irish banks and building societies.

On May 23rd, the Irish tax authority announced that deposit holders will be given until 15th September next year to declare any untaxed amounts which they have lodged in their deposit accounts.

If they do so, the Revenue will mitigate the tax penalties which can apply, and undertake not to publish the tax defaulter's name.

A disclosure will also mean that Revenue will not pursue the case for prosecution for tax evasion.

The new scheme is very similar to those which Revenue have operated in recent years for disclosure of untaxed money in offshore assets and single premium insurance policies.

The Institute of Chartered Accountants in Ireland (ICAI) has since issued a cautious welcome to the new disclosure scheme, with the company's Director of Taxation, Brian Keegan, explaining that:

“Revenue are focusing on untaxed money lodged in ordinary deposit accounts. They recently gained new powers to require the banks to provide the names and addresses of deposit holders. Revenue will be able to compare the information they already have from Returns of Income and the like with these bank details, to help them detect evasion. Before that happens, taxpayers are being given an opportunity to come forward."

Mr Lenihan, meanwhile, stated this week that the vast majority of bank account holders have nothing to worry about, because their savings consist of funds which were properly treated for tax purposes.

The Minister has also welcomed the confirmation by the Revenue that the voluntary disclosure initiative only applies to people who had funds of EUR100,000 or more, where the money on deposit arose from taxable sources which were not declared for tax purposes.

The initiative, which is focused on large deposit accounts, will impact a relatively small number of tax evaders: the vast majority of taxpayers have no need to worry, he reiterated.

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