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Ireland – Revenue Urging Disclosure of Undisclosed Offshore Matters by 1 May

Ireland – Revenue Urging Disclosure of Undisclosed

This GMS Flash Alert reports on taxpayers’ ability to make a settlement in Ireland under a qualifying disclosure in cases where any liability in the settlement relates to “offshore matters.”

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The Revenue Commissioners (hereinafter, “Revenue”) are implementing a change in Ireland’s law that restricts a taxpayer’s ability to make a settlement under a qualifying disclosure (which can abate penalties and help the taxpayer avoid being disclosed as a tax defaulter) in cases where any liability in the settlement relates to “offshore matters.”1  This change is to take effect from 1 May 2017.

The term “offshore matters” is defined very broadly.  It includes any income, gains, accounts or assets arising, held or situated outside Ireland.  Therefore, this is potentially relevant to a lot of taxpayers.

In light of this, Revenue is encouraging taxpayers with undeclared liabilities to come forward and make disclosures pre-1 May 2017. 

WHY THIS MATTERS

While Revenue’s communication on this matter acknowledges that it will not be relevant to the vast majority of taxpayers whose returns are correct and complete, we note below some examples of potential instances where taxpayers could be affected:

  • Assignees to Ireland who have not fully declared foreign income and gains;
  • Local hires of the Irish subsidiary of a multinational company who have not declared dividends on shares that they hold in the multinational company; and
  • An Irish resident who inherited an asset abroad. 

Failure to come forward and make the disclosure of liabilities prior to 1 May 2017 may result in increased penalties and publication on a list of tax defaulters. 

Context and Next Steps

The Revenue in Ireland has commenced receiving information about offshore accounts and assets held by Irish residents from other jurisdictions under various exchange of information arrangements.  Revenue is in the process of cross-referencing that information to other information that it holds and to tax returns. 

As part of Revenue’s campaign to encourage taxpayers with undeclared liabilities to come forward, Revenue recently issued letters to approximately 500,000 individuals referring to the 1 May 2017 deadline. 

For a disclosure that includes a liability related to an offshore liability to be a qualifying disclosure, it must:

  • be submitted to Revenue pre-1 May 2017;
  • be complete and correct;
  • be in writing;
  • include a computation of the tax, interest, and penalties; and
  • be accompanied by a payment for the computed amount.

KPMG NOTE

Once the 1 May 2017 deadline has passed, Revenue intends to investigate perceived discrepancies and pursue unpaid tax liabilities.  

FOOTNOTE

1  For the 17 February 2017 announcement on the Web site of Ireland’s Revenue.

The information contained in this newsletter was submitted by the KPMG International member firm in Ireland.

© 2017 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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