Neil Callanan - Revenue on the warpath over developers' tax planning

Neil Callanan - Revenue on the warpath over developers' tax planning

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Revenue chair Josephine Feehily

The Revenue Commissioners are probably the most proactive arm of government, and as you'd expect, they haven't been slouches since the establishment of Nama.

Developers were known for their aggressive tax planning and the Revenue has written to Nama seeking information about developers and their personal circumstances. "There have been exchanges on this basis," a Nama spokesman confirmed.

Of course, the presence of Frank Daly as chairman of Nama should make the Revenue's job easier. As a former Revenue chairman, Daly recently pointed out to the Dáil Public Accounts Committee that he had had a "considerable degree of success in countering tax evasion in this country".

Nama has been sceptical of developers' asset disclosures and has used tax returns, forensic accountancy, spending records and other material to check back on their sworn statements and wealth. Given their lavish spending during the boom, some developers probably fear a large benefit-in-kind bill at the very least.

In the coming weeks the Revenue will receive another weapon for its arsenal. New mandatory disclosure regulations are designed to tackle aggressive tax avoidance schemes and take the sting out of the loss to the exchequer. Of course, it comes far too late but it's designed as an early warning system that will allow Revenue to judge the legitimacy of a scheme.

Tax practitioners did get some relief, however, with the new rules applying from 17 January, which was when they were made. In addition, they will not have to provide Revenue with a client list identifying those to whom the schemes were made available in certain cases, and the Department of Finance is to consider the impact on competitiveness of such a move. Competitiveness is key, of course, as all professional classes in Ireland are overpaid.

The review in two years will be especially interesting to see if the legislation is meeting its objectives. The few people with real money are the only ones who'll really be affected by that particular review.

The debt penalty

A source passed along an interesting nugget about Trevor Sargent's attempt to have the definition of treason widened to include economic treason – "actions that result in reputational damage for the country, an unacceptable economic cost, or a loss of economic sovereignty for the state". The 1939 Treason Act states that the penalty for treason is death (though the Criminal Justice Act revoked that).

"That would focus the mind wonderfully prior to accepting a bailout from the IMF, or indeed accepting the position of CEO of an indigenous bank," the source said. "Even a game of golf and dinner takes on a different hue in such an environment."

via tribune.ie

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