A chargeable person is obliged to make a return of tax to the Collector General in respect of a tax year or period in which he is assessable. The return is in a prescribed format. It was traditionally in printed form, which was completed and signed by the applicant. The return is now undertaken online on-line in most cases, through the revenue online service (ROS).
Any person who carries on a trade, profession or activity whose profits are subject to tax under schedule D or F, or who has chargeable capital gains must keep and retain records. The records must allow an accurate return to be made.
Linking documents, which are drawn up in the making up of accounts and which show details of the calculations linking the records to the accounts, records must be retained. The records must be in writing or other permanent form. They may be in electronic form. The failure to keep records linking documents etc. is an offence, subject to a penalty up to €3,000.
Where records are kept electronically, Revenue must be furnished with details of the process by which they are preserved and recorded. The inspector of taxes may inspect records within four (formerly) six years of the end of the year of assessment concerned. Investigations, inspections and assessments may be undertaken for earlier periods, where there has been a negligent or fraudulent return or it is so suspected.
Revenue have powers in relation to the inspection of records in order to verify the authenticity of the return. It may inspect all records required to be kept, as set out above. For this purpose, an authorised officer of the Revenue may enter any premises where he believes that business is carried on, where records may be kept or any property where they are located.
Revenue powers are broadly in accordance with investigatory powers generally. Extensive powers are conferred on authorised officers. They may require persons present at the above premises, other than customers, to produce records and items. They made search the premises records and things which they believe have not been produced.
Revenue may examine records and assets and take copies and extracts. They may remove them for a reasonable time for the purpose of examination or proceedings. They may require any person carrying on a business or trade to provide all reasonable assistance. In the case of electronic / IT equipment, Revenue may require that assistance be given by employees etc., in operating the computer in order to access the relevant information.
Revenue is entitled to obtain records from professional advisors, except
- information subject to legal professional privilege;
- information of a confidential medical nature and
- professional advice provided that it is not part of a dishonest, fraudulent or criminal purpose.
An authorised officer may enter a dwelling house, with the authority of a District Court warrant or with the consent of the occupier.
It is an offence to obstruct an authorised officer or fail to comply with the requirements of a search warrant or requirements made by an authorised officer.
A warrant may be obtained to enter business premises forcefully. It may be obtained as part of a so-called “dawn raid” approach.
The powers of inspection also apply to the obligations of a trader as an employer under PAYE. In this case, records must be kept for six years. The powers have similarly been extended to certain other obligations owed to Revenue, including relevant contracts tax obligations. .
Revenue officers may be accompanied by members of An Garda Siochana. The latter may arrest persons who obstruct or interfere with the investigation by the authorised officer. Where persons have been arrested, an authorised officer of the Revenue, may question them in relation to serious / indictable revenue offences (those carrying a punishment for five years or more).
Revenue may serve a notice requiring submission of documents or explanations which is relevant in its opinion, in the determination of tax liability. Written authorisation is required from the Revenue Commissioners (in this sense the Commissioners themselves). The formal request is in writing and requires compliance within 21 days. The Revenue official must give the reasonable grounds for the belief that the records contain relevant information in respect of tax liability.
The Revenue must first request voluntary compliance. The existence of the power is usually sufficient to ensure voluntary compliance. Information may be required from professional advisors under this power.
The Revenue may apply to the High Court for an order to require the production of tax records or an explanation, where there is failure to do so. High Court may make the order where it is satisfied there are reasonable grounds. Failure to comply with the above notices is an offence, subject to penalty up to €4000.
Authorised officers of Revenue may seek explanations and records from third parties. This power applies notwithstanding and obligation as to confidentiality or restriction upon disclosure imposed by statute or otherwise. Revenue must have reasonable grounds for serving a notice.
The notice must be in writing specifying what is required pursuant to the power. Thirty days are given to comply. Failure to comply is subject to a penalty of up to €4000.
Revenue practice requires that the taxpayer be given an opportunity to supply the relevant information first. If it is not furnished voluntarily, the taxpayer is given notice of failure of compliance and of the intention to seek the external records. The obligation to give prior notice does not apply, where this would frustrate the purpose of the inquiry.
Revenue may apply to the High Court for an order directing a third-party to produce records or information. Written consent of the Revenue Commissioners (the commissioners) to the exercise of the power, is required as above. Revenue must have reasonable grounds to believe that the taxpayer has failed to meet an obligation, that it has a significant effect and that the information is relevant to the assessment of liability.
Where the High Court is satisfied the application is based on reasonable grounds and the criteria is satisfied, it may make the order, subject to conditions as it sees fit. The application may be made in private.
Revenue also have administrative powers, exercisable at their discretion, to require information from financial institutions. The Revenue Commissioners themselves must give authority for the issue of a notice. Revenue may give notice to a financial institution, naming a taxpayer and requiring information as to his / its accounts. There are 30 days in which to comply. This obligation applies, notwithstanding confidentiality obligations between customers and the institution.
Revenue may make copies of account details and records. It is an offence for an institution to fail to comply. Revenue issues a taxpayer with a copy of the notice served. Revenue practice requires that the taxpayer should be given the opportunity to submit the information voluntarily, within 10 days of notice.
An authorised officer may, with the consent of the appeal commissioners, serve a notice on third parties requiring information. The consent of the Revenue Commissioners themselves is required to the application. The authorised officer must be satisfied that there has been a failure to comply with taxation obligations, resulting in serious breaches of taxation legislation. Failure by the third-party to comply, is subject to a penalty of €19,045 and daily penalties of €2,535 for each day on which the failure continues.
Revenue may apply to High Court for orders against non-resident financial institutions, requiring them to disclose information relating to records relevant to an Irish taxpayer. It applies to an office or institution under the control of an Irish resident institution and institutions authorised in another state, operating in Ireland under EU freedoms to provide services. The Revenue may seek information relevant to the liability to taxation.
Revenue may apply to the appeal commissioners, to approve the issue of an administrative notice to a financial institutions requiring records relating to taxpayers or groups of taxpayers, including unidentified taxpayers.
Revenue may apply for an order against a financial institution to provide records in relation to a taxpayer or class of taxpayer. Revenue may apply for an order freezing assets held by the taxpayer with the financial institution.
Revenue may require a person who is assessable to tax, to provide a statement of affairs showing all of his assets and liabilities. The obligation extends to all assets to which they are beneficially entitled.
Revenue may make a requirement of persons who are obliged to deduct and pay tax as agents on behalf of another, such as a trustee, agent or other representatives.
There are various provisions in the Taxes Acts requiring persons to make third-party reports in relation to certain aspect of the heir dealings with other taxpayers. Third-party returns are automatically required for most businesses of transactions over a certain level (€3,000). Revenue require the returns to be filed electronically in a specified format.
Persons who manage a property on behalf of another and who are in receipt of rent, must make an annual return to Revenue with details of the owner/landlords, address of the premises, rent. Housing authorities, the Department of Social Protection and certain other public bodies must keep records and make returns of rent paid under social housing schemes.
Agents are obliged to report income from all property wherever situate. A return is to be made with much the same information as above. Failure to comply with the obligations is an offence.
Persons carrying on a trade or business who make payments for services in connection with a business, other than as employees to persons resident in Ireland, payments for services in connection with the acquisition or disposal of trade of a business or periodical payments, must make a third-party return.
The return must set out the name, address and tax reference of persons to whom payments are made, the periods for which services are provided, particulars of the service, business name and address. The obligation does not apply to payments where the total made do not exceed €635, now €3,810. There is a penalty for failure to file the return.
Persons in receipt of profits and gains on behalf of another, must make a return showing a statement of the profits and gains, name and address of the person entitled and a declaration as to their residence, marital and other status. The same limits as above apply.
Persons who have carried on a business receiving money or interest where payable without deduction of tax, must make a return of interest paid during the year. It must give names and addresses of persons to whom the payments are made. It applies in respect of interest of more than €65 (increased to €635 under practice).
The obligation does not apply to banks in respect of non-residents. The 2004 EU savings directive require information to be furnished in respect of EU residents.
Nominee holders of securities must file an annual return showing the name and address of beneficial owners, nominal value, particulars of securities and registrations.
Intermediaries, who in the course of a trade, open a foreign account off shore fund or foreign life policy, must make a return showing the particulars of the individuals for whom they have acted in that regard, tax reference, address, date of opening. There is a penalty for failure to make the relevant return.
A non-resident is a chargeable person for assessment if he opens a foreign account. He must make a return of income, including details of the opening of the account.
Intermediaries who assist Irish persons in opening accounts, acquiring or disposing of an interest in a foreign fund or life policy, must make a return of the relevant details. There is a penalty of €4,000 for failure to do so.
The National Asset Management Agency is obliged to make a return of information to the Revenue Commissioners in respect of each bank asset acquired. They may be required to furnish evidence and documents relating to such assets and the persons concerned, in so far as relevant to taxation matters. All the above returns are subject to audit in accordance with revenue audit procedures.
Employers must make a return when required, showing details of the residence of all persons employed and particulars of benefits received by them, including non-cash benefits, cars, preferential loans, certain expenses paid
A number of amendments are made by Finance Act 2017 to ensure that Revenue legislation complies with the EU General Data Protection Regulation. It sets out a clear legal basis for processing including automatic processing of taxpayer information by Revenue.
It sets out the rights of the taxpayer with regard to the safekeeping, retention, use and accuracy of information. It provides for the purposes for which taxpayer information may be processed. It provides lawful restrictions on specified grounds. It sets out to the rights of individual taxpayers with regard to access to their information and in respect of processing and profiling of their information. It provides that where the rights of taxpayers to access to information is restricted, written grounds are to be given to facilitate a challenge by the taxpayer.
Finance Act 2017 makes amendments to Revenue’s powers. Amendments are made to ensure that notice is served affecting the data confidentiality is undertaken on accordance with best international practice.
Amendments are made regarding the circumstances in which an authorized officer of Revenue in applying for the High Court requiring a financial institution to deliver information relevant to a taxpayer’s liability. He may request and the judge may order that the existence of the order not to be disclosed to the relevant person.
A request may be made only on reasonable grounds for suspicion of serious prejudice to the proper assessment or collection of tax. The criteria in relation to non-disclosure to the taxpayer of the application to court have been eased in accordance with international standards, published by OECD. The grant of the non-disclosure order remains a matter for the judge.