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ICAI reacts to new Revenue probe
[23 May 08]
(Friday, 23rd May 2008) The Revenue Commissioners has announced a new disclosure scheme relating to moneys held in Irish deposit accounts. Deposit holders are being given until 15 September next to declare any untaxed amounts which they had lodged in their deposit accounts. By so doing, Revenue will mitigate the tax penalties which can apply, and undertake not to publish the tax defaulters 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.
ICAI Director of Taxation Brian Keegan said “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”.
The initial focus of the Revenue investigation will be on deposits totalling more than €100,000. Mr Keegan however pointed out that from past experience of special investigations, Revenue could well revisit this amount in a second phase of the investigation.
“Tax evasion is unacceptable, and special investigations of this nature have an important part to play in eliminating evasion. However, there is always a cost to compliant taxpayers as they can unwittingly fall into the Revenue investigation criteria and become obliged to establish they have no tax issues. An example of this might be where a person has sold their house, deposited the money and a short time later spent it again on a new house. This could bring them within the scope of the investigation, as they would have had more than €100,000 on deposit.”
ICAI will work with Revenue on procedures to try to minimise the impact of the investigation on compliant taxpayers.
Contact Details
Contact Name :: Brian Keegan, ICAI Director of Taxation
Email Address :: brian.keegan@icai.ie
Telephone :: +353 1 637 7347
Fax :: +353 1 668 0842
For PAYE taxpayers, Balancing Statements have never been set up to collect PRSI/Levies, only Tax. There may be issues there for some people.
The issue is whether the deposits are hot or funny money...the interest earned is not the what Revenue are concerned with.
As far as I know once you earn more than a certain amount in annual interest (c. €3,175?) then you may be liable for PRSI. DIRT (20% usually deducted as source) remains your total tax liability. At least that's my rough understanding so I am open to correction on the specific details.I understand that but I don't get the issue re PRSI payment on the interest earned.
There has been widespread coverage in the media and elsewhere of the new Revenue profiling system in recent months. Is the acronym "RACE" or something like that? I was thinking Revenue Account Profile Engine but that might be a bit offside...Is this do do with the new IT system I heard someone from revenue boasting about recently.
It supposedly analyses declared income vs property / vehicle / company ownership and flags cases where the capacity for the latter exceeds the former.
Is this the next step?
So you only need to make a disclosure if you had more than €100K on deposit (in one or more accounts?) AND some of the funds on deposit were not previously declared for tax (i.e. hot money or cash in hand income)? Is that more or less it or is it more subtle than that...?Taxpayers who had €100,000 or more in aggregate in these accounts (which included funds not previously declared for tax) at any time between 1 January 2005 and 31 December 2007 have until 15 September next to make a voluntary disclosure under an initiative announced by the Revenue Commissioners today (23/05/08).
Revenue emphasise that the focus is on money which was undeclared for tax purposes and this current initiative will affect a relatively small number of taxpayers.
A recent thread here stated there are millions in credit union accounts exempt from DIRT.
The Regulation can be found here
[broken link removed]
After you have read it you will be fit to read the Lisbon Treaty
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