The Revenue recently issued their annual report for 2015. Some interesting facts which are contained in the report are as follows:
• Net tax receipts for 2015 were €45.78 billion compared with €39.4 billion for 2014. Taxes on income, which include USC, DIRT, dividend withholding tax, accounted for 40% of overall net receipts with the other main contributors being VAT (26%), corporation tax (15%) and excise duties (12%).
• Net receipts from all taxes have increased, apart from DIRT and stamp duty (including local property tax).
• Particularly interesting in the context of the proposal under the Programme for a Partnership Government to phase out the USC are the statistics regarding USC. USC accounts for almost 23% of the overall receipts from taxes on income and 9% of the overall receipts from tax. USC was the tax which showed the largest increase of all the taxes in terms of the actual amounts received, not just the % increase. The amount of USC received in 2015 amounted to €4.17 billion compared with €3.65 billion in 2014.
• Some interesting statistics in terms of Revenue service were as follows:
– 89% of complaints were processed within 20 working days
– 96% of calls were answered within 5 minutes
– 91% of correspondence was dealt with within 30 working days
– 88% of applications for tax clearance certs were dealt with within 5 working days
• In terms of tax collection, more than 90% of PAYE/PRSI, VAT, Income tax, and RCT was collected within the due month. CGT lagged behind the others with only 89% being collected within the due month!
• The number of corporate and personal insolvency actions in which Revenue participated in in 2015 was down significantly under all headings (voluntary liquidations, receiverships, examinerships, bankruptcies etc.)
• The numbers of all types of audit and compliance interventions carried out by Revenue in 2015 declined apart from assurance checks. Assurance checks are a non-audit type of intervention where Revenue contacts the taxpayer and or their agent with a specific query on some matter relating to the taxpayer’s affairs. Revenue advises that such checks frequently arise because of some kind of discrepancy in the information held by Revenue relating to the taxpayer. Assurance checks generally focus on a specific risk or period and can be made in person or by email/telephone and accounted for almost half of Revenue’s total audit and other interventions in 2015.
• 6,612 audits were completed in 2015 compared with 7,636 for 2014. Of those audits carried out in 2015, 65% were audits covering all tax heads, 9% covered more than one tax, 21% covered one tax only and 4% were carried out in relation to a single issue or transaction. 400 random audits were undertaken in 2015. Of random audits completed in 2015 (270) almost 63% resulted in no additional tax payment. An analysis of 2,914 audits carried out by sector shows that as in 2014 the greatest number of audits were carried out in the construction sector (26%) followed by retailers (22%), the rental sector (14.65%) and wholesalers (14%). Non-audit risk management interventions were down slightly in all sectors analysed other than rental, wholesalers and pubs. Interestingly the overall yield from non-audit interventions in the sectors analysed increased by almost 40% from €77 million to €129 million. The tax yield from non-audit interventions in the retail, rental and wholesale sectors was substantially higher than the yield from audits. Overall tax yield from audits was €327.9 million and from non-audit interventions was €314.6 million.
• In 2015 Revenue used Social Network Analysis to identify 54 cases for referral for VAT audit or investigation.
• Ongoing special investigations continue to yield additional revenue. In 2015 the yield from offshore assets, trusts and offshore structures investigations, ongoing now for more than 10 years, was €60 million. Cumulative yield from special investigations to date was €2,808 million at the end of 2015.
• There were 713 criminal convictions for non-filing of tax returns, 42 in relation to VAT/P35’s, 5 in relation to intrastate non-compliance and 13 for other tax related matters. 17 cases involved serious tax offences resulting in custodial sentences in 3 cases. 11 convictions were for serious duty offences resulting in custodial sentences in 2 cases. Civil penalties were applied in 723 cases.
• 234 FOI requests were received of which only 47 were released in full with 105 released in part. 43 requests were refused. The remainder were withdrawn, dealt with outside FOI, proceeded to a request for Internal Review or to the Appeal Commissioners
• 1,386 requests under the Mutual Assistance Directive were received by Revenue from EU member states in 2015.
• The first exchange of financial account information between Ireland and the US under the Foreign Account Tax Compliance Act (FATCA) took place in September 2015.
• The first automatic exchanges of information under the EU Directive on Administrative Co-operation in the Field of Taxation took place in June 2015.
• 17 requests for an External Reviews were made in 2015. Of the 13 cases finalised in 2015. Of these cases 9 were held in favour of Revenue.
• 137 complaints were made to the Ombudsman relating to Revenue. 82 of these complaints were withdrawn. Of those dealt with 10 were upheld, 29 were not upheld and in 12 cases assistance was provided.
• Taxpayers who donate certain heritage property to a specified national collection, the Irish Heritage Trust or the Commissioners of Public Works receive a tax credit of 80%/50% of the market value of the property. There were three such donations in 2015 valued at €2 million, €200,000 and €1.75 million.
• During 2015 Revenue settled 160 tax avoidance cases yielding €42 million. 224 appeals were settled in 2015 of which 7 related to general anti-avoidance legislation challenges, 51 relating to targeted anti-avoidance legislation and 165 other avoidance appeals. At the end of 2015 Revenue say that 452 cases under general anti-avoidance and 593 cases of other tax avoidance were being managed. Finance Act 2014 introduced provisions which allowed persons who had entered into tax avoidance schemes to settle with Revenue and by so doing avoid having to pay a S.811A surcharge and qualify for a 20% reduction in interest payable. To avail of the provisions the person had to make a “qualifying disclosure” on or before 30 June 2015. 137 “Qualifying Avoidance Disclosures” were made in 2015 yielding €43 million.
• There were 6,614 people working for Revenue at the end of 2015, a net increase of 2% over 2014. During 2015 407 staff were recruited including specialists in analytics, transfer pricing, law, economics and IT. 400 new staff are expected to be recruited in 2016