Published on 23/02/17
The penalty for undeclared income and gains is 100% of the tax on the undeclared amounts. However, where a person makes a qualifying voluntary disclosure to Revenue reduced penalties apply. In addition, details of the settlement amount are not published and Revenue will not consider prosecution. From 1 May 2017, any disclosure made to Revenue which includes an offshore matter will not qualify for these benefits. Furthermore, disclosures which do not relate to offshore matters will also not qualify for these benefits where the taxpayer, either before or after the disclosure is made, incurs a penalty in relation to offshore matters unless the penalty falls into lowest penalty category.
A voluntary disclosure can still be made to Revenue before 1 May 2017 on undeclared income or gains arising from an offshore matter which would avoid publication, the risk of prosecution and benefit from lower penalties. An offshore matter is defined as income or assets outside the State.
Tax defaults on offshore matters can arise for a number of reasons. For example:
• Undeclared income or gains on a UK stockbroker account opened to avail of lower commissions.
• Interest earned on a bank account in Northern Ireland opened during the banking crash.
• Deemed profits on certain foreign investment products after 8 years.
Revenue now receives extensive information from foreign tax authorities as a result of international agreements with over 100 countries (including tax haven countries) and EU Directives. The information can include details of bank accounts, property profits, director’s fees and pensions in that country.
The new regime applies to both individuals and corporates.
Please do not hesitate to contact Brian Purcell or your PMQ contact if you have any concerns in relation to an offshore matter.
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