Early in August, the minister for finance confirmed that the Irish revenue commissioners brought in nearly 88 million Euros during the initiative to tackle the common problem of offshore tax evasion.
The Offshore Tax Evasion Initiative
The offshore tax evasion initiative in question was announced as part of the budget for 2017. The initiative gave tax defaulters who had outstanding liabilities related to offshore assets the ability to make a voluntary disclosure about those liabilities. Those tax defaulters had until May to make their disclosure.
According to the minister for finance, this initiative led to a total of 2,859 disclosures from high-net-worth individuals and others. The declared value of those disclosures was 88 million Euros. That included 56 million Euros in taxes, 26 million Euros in interest, and 6 million Euros in penalties. Of the disclosures, nearly 70 percent were involved in the four jurisdictions of the United Kingdom, France, the United States, and Spain.
Not the First Similar Tax Initiative
This is not the first time that the Irish revenue commissioners had an offshore tax initiative of this nature. They followed a similar process the previous year, announcing the initiative during the 2016 budget and giving those with previously undisclosed offshore income until May 2017 to disclose their assets. That version of the initiative included a discounted penalty rate of 10 percent of the taxes due to encourage high-net-worth individuals and corporations to take part.
The tax initiative worked very well in 2017, with the revenue commission confirming in late 2017 that it received 2,734 disclosures prior to May 5 of that year, receiving 84 million Euros. That figure broke down into 53 million Euros in taxes owed, 25 million Euros in interest, and 6 million Euros in penalties. The commissioners also announced at the time that those who did not come forward prior to the May deadline would have higher penalties, would be listed in the quarterly publication of tax defaulters, and even have the possibility of criminal prosecution.
This was just one of the more recent initiatives from the commission’s offshore-assets group that was set up in 2001. As of November 2017, that offshore-assets group had already raised 1 billion Euros via offshore tax investigations.
What Happens Now
The Irish revenue commissioners have not announced what the next step will be, but those who did not disclose their offshore taxes by the deadline will likely face the same penalties as the defaulters from the previous year.
Did you find this article useful?
Subscribe to our newsletter for more!