The Revenue Commissioners are responsible for the administration of the principal taxes in Ireland. The Revenue Commissioners constitute a public body, which is independent of the Government, but is answerable to the government in respect of the exercise of their functions.
Inspectors of Taxes are appointed by the Revenue Commissioners. The Inspectors make assessments of tax liability. In the event of a dispute between the taxpayer and the Revenue Commissioners, in respect of an assessment, the matter may be appealed to the independent Appeals Commissioners. If the decision of the Appeals Commissioners is disputed on that point of law, it may be referred to court.
The Revenue Commissioners publish a significant amount of information on their website www.revenue.ie in relation to taxation law and practice. They publish Guidance Notes on tax legislation and tax briefings for taxpayers and tax practitioners
The collection of tax is administered by a separate body; The Collector General. The Collector General and its officers collect tax payments. The Collector General enforces collection to unpaid taxes, using the legal process or other special collection methods.
The systems of tax assessment and collection rest primarily on self assessment and payment of the relevant liability. Individuals and businesses have legal obligations in respect of tax assessment and payment. The Revenue may make assessments pre-emptively or where they disagree with the taxpayer’s self assessment. They actively monitor and pursue compliance through desk and field audits.
Failure to comply with tax obligations is a criminal offence. There are numerous obligations, breach of which constitute an offences of varying degrees of potential punishment and penalty. Apart from criminal sanctions, the Revenue charges a penal rate of interest and civil penalties on unpaid and underpaid tax. Interest is charged at .011% per day are in arrears of tax. The level of penalties is often negotiated in the context of settlements following Revenue audits.
Businesses are obliged to keep and retain records and information relevant to the tax liabilities. They are also obliged to keep and retain linking documents. These are the records which link the primary accounting records to the final accounts.
The Revenue has significant powers to enter premises to inspect documents and records relevant to tax liability. It can inspect both written and electronic documents. It can remove and / or copy documents. The Revenue may use all information and documents to which they have access for the purpose of making tax assessments.
Tax advisors, auditors and certain other persons, who obtain information that a company has committed a revenue offence are obliged to notify the company in writing of the offence and require that it notify the Revenue Commissioners. If this is not done, the relevant person must cease to act for the company and must not do so for at least three years. Failure to do so is an offence.
There are agreements between the taxation authorities in various countries relating to the exchange of information. Double taxation agreements deal with the exchange of information between the taxation authorities, as well as double taxation. EU legislation requires member states to exchange information relating to assessment of certain tax liabilities.
Self assessment
Any person or company which is subject to income, corporation or capital gains tax for a tax period (calendar year) must make a self-assessment tax return. There is an exception to the obligation where an individual’s income is entirely assessed and taxed by his employer through the PAYE system. The PAYE exclusion does not apply to company directors, except for directors of certain non-trading companies. It is preferable to make a return, even if exempt, so as to ensure that all allowances and credits have been claimed and so that any overpayments are repaid.
The obligation to make a self assessment tax return arises, without notice or assessment issuing from the Revenue. In practise, the Revenue issue self assessment forms to prompt returns. They also issue assessments where they believe there is a liability that is not being declared. They may issue an assessment or an amended assessment on foot of a return of income.
Finance Act 2011
The Finance Act 2011 imposes a penalty of €3,000 on a person who makes a false claim or assists in making a false claim. Tax wrongly refunded may be recovered from the beneficiary/recipient. The penalty applies to the claimants and agents.
Where there has been any incorrect claim for an allowance, credit or deduction relief or repayment, income tax contained in an assessment other than an assessment on a chargeable person or in relation to a balancing statement is due on 1st July in the year of assessment or 1st January on the following year.
Revenue may determine the tax due and make a determination. A aggrieved person may appeal. Revenue may raise as assessment pursuant to determination, there being appeal against such an assessment.
Returns
Returns may be made personally or by a tax adviser or agent. Spouses may male joint returns, effectively being treated as one person, subject to certain conditions.
The tax year is the calendar year. The tax liabilities are assessed with reference to income or gains in the year. An individual’s tax return must be made by 31st October in the year following the year to which the return relates. in the case of a company, the return must be made by the 21st day of the ninth months of the the accounting period, with reference to which the company is taxed.
The tax return must contain the information required by Revenue Commissioners. There is a standard printed form of tax return. Electronic returns are strongly encouraged. Extra time is allowed for an electronic filing. Electronic filing is likely to become increasingly compulsory.
In the case of a partnership, the so-called precedent partner is required to make a partnership return, in addition to his or her individual return. There are rules for determining who is precedent partner.
Where a tax a return is made late, certain tax reliefs, including capital allowances, losses and other reliefs and other allowances are restricted. If the return is less than two months late, the allowances and losses are restricted to 75% of the otherwise allowable amount or the maximum restriction. The maximum restriction is €31,730 . In the case of a returns more than two months, the allowances and losses are restricted to 50% or the maximum restriction of €158,715.
A return may be treated as incomplete, if it fails to contain the requisite information relevant to be reliefs and allowance in question. In this case, the relevant date is treated as the date of filing of a correct return, if the matter is not dealt with within reasonable time of the matter being gone to the taxpayer’s attention.
The Revenue Commissioners will frequently issue notices requiring returns. However, the requirement for a self-assessment return applies irrespective of whether notice is given. A person who is liable to tax, must inform the Revenue of its own accord.
There are penalties for failure to make returns or for making incomplete or incorrect returns. Penalties are in addition to sums charged as tax and interest. Revenue impose “civil” penalties without a court order or conviction. More serious offences may be prosecuted in court. Serious revenue offences are subject to a fine of up to €12,695 and five years imprisonment. It is also an offence to facilitate or a serious tax evasion .
The Revenue may require a person to deliver a statement of assets and liabilities. They may see accounts and records. It may seek proof and evidence of income.
The Revenue can obtain information from certain third parties by serving notices. There is an exception concerning confidential privileged information held by professional advisers. There are special powers to obtain information from banks and insurance companies.
Revenue can require information relevant to the tax liability out of the taxpayer being investigated. If information is not furnished voluntarily, the Revenues can apply to court to compel production of the information. More extensive powers require court approval.
Requirement can be made from any trader in relation to payments made to persons other than employees for services rendered. Returns can also be required of representatives nominees and trustees. Businesses who make payments over a certain value to third parties and representative, nominees and trustees are obliged to make certain returns automatically as part of their tax returns.
The obligation to pay tax is separate from and arises prior to, the obligation to make a return and assessment. A person liable for tax for a period, must make a payment of preliminary tax by 31st October in the relevant tax year. The actual tax return is not due until the same date on the following year. In the case of corporation tax, the payment must be made within six months of the end about the accounting period. These dates have been brought forward for certain larger companies.
A small companies may pay preliminary tax based on 100% of the previous year’s tax liability, if the tax liability does not exceed did not exceed €200,000. New companies which do not expect tax liability to exceed €150,000 in the first year do not have to pay preliminary tax in that year , changed to €200,000.
Large companies must pay preliminary tax in two instalments. The first is due in the sixth month of the accounting period. It must be 50% of the tax for the preceding period or 45% of the tax for the current period. The balance which will bring the total preliminary tax to 90% of the liability for the current period must be paid in a second instalment must be paid by the eleventh month of the accounting period.
Preliminary tax is a pre-payment on account of the liability ultimately assessed in the tax return. The balance must be paid with the tax return for the period in the following year. Preliminary tax may be paid by direct debit in eight monthly instalments, in months five to twelve. The Revenue may vary the arrangements for collection in monthly instalments.
If no preliminary tax payment has yet been, the Revenue may issue a notice of the amount of preliminary tax, which the relevant Inspector of Tax believes to be payable. This amount is then due, unless on before the date on which the return is required, that person makes a payment of preliminary tax in normal way or gives notice that no liability will arise.
Where the Revenue is satisfied that the preliminary tax meets the liability it may elect not to make an assessment and notify the taxpayer. The taxpayer may require an assessment if he chooses .
If the due amount of preliminary tax is not paid, the interest and penalties may arise. Interest is payable at a rate of 0.011 per cent per day. Interest (at a lower rate is paid on preliminary tax overpaid).
Finance Act 2011
The due date for payment of income tax under self-assessment is 30th September since FA 2011 for any year of assessment, where the assessment is made prior to 30th September.
These provisions are available where a person makes a claim for excess credits or reliefs who is not otherwise obliged to make a return. This may apply for example to a PAYE payer.
The due date for income tax under assessments made on employees or other persons not chargeable to make a return is 30th September instead of 31st October. These ties in with the date for self-assessment returns
Assessments by Revenue must be made within four years of the end of the relevant tax period. An assessment will only be raised where the self assessment is not made or is not accepted.
This is provided that a return has been made by the taxpayer giving a full disclosure of relevant liabilities. If this is not the case then, an assessment may be made at any time whatsoever. There is no time limit, where there has been failure to disclose the full facts or where there has been fraud.
An appeal can be made against an assessment. However, the assessed tax liability must generally be paid. The grounds of appeal must be set out and outstanding returns must generally be delivered.
Appeals on the specified grounds may be made against assessments raised in the case of failure to deliver unsatisfactory returns only if the return is deliberate and the amount paid on the assessment at least equal to the liability. If the assessment was based on part recurrence, but
There is no appeal against a notice of preliminary tax or against items based on accepted details or agreed points.
In the case of a failure to deliver returns or satisfactory returns an appeal may be made, only once the return is delivered, and the amount of outstanding tax on foot of the assessment at least equal to the liability, or the assessment were based on the return .
Where an assessment is made before that date for preliminary tax. It is due no date for preliminary tax that is made of the about an preliminary tax has been paid the balance payable is jailed in the case of companies one month from the date of assessment on the return filing date for accounting periods and for income-tax worker returned to be delivered to buy a first October provided the amount or provided the final liability over amount paid by 31st of October is no greater than €635 and 5% of tax payable or €3175 if less. The extra tax is due and payable by 31st of December.
It the preliminary tax obligations have not been complied with, the tax is treated as becoming due on the due date for preliminary tax. Extra tax due following an amended assessment is due as at the original assessment unless the assessment was made on foot of a full and accurate return that has been delivered in time.
On an appeal and the excess backs plan payable over amount paid is to and bowling from the original assessment will ask the access does not exceed 10% and preliminary tax obligations have been dealt with .
In the initial year when a person becomes subject to tax, the tax for the previous year is nil so that no preliminary tax arises. The liability will have to be paid within one month at the assessment for the year being received, or an interest charge would arise . preliminary tax for the second and Major years is accounted for in the usual way . revenue Commissioners recommend payment of preliminary tax in the first year to avoid cash flow .
The obligation to give at taxpayer is already a chargeable person and commences a new source of income preliminary tax is paid in the usual away .
The following parties must make returns in respect of monies paid to third parties and may have an obligation to withhold tax and pay it as part of their return
- nominee holders of shares and equivalent instruments ;
- persons paying interest to non-residents;
- certain intermediaries who receive payments on behalf of others;
- trustees and nominees;
- managing agents.
The return must be made by 31st October following the relevant year for individuals. Revenue may exclude certain persons from the obligation to make the return. Revenue have issued a statement practice regarding the extent the information required to be returned automatically .
The Revenue facilitate and encourage electronic filing of tax returns. The person making the return must be Revenue approved and comply with certain requirement The return must incorporate an electronic signature identifier. The return must be receipted by Revenue.
The Revenue has power to require electronic returns. Where returns are made electronically, taxes are payable by 23rd of the month so that the normal period is extended .
In 2008 legislation standardises positions in respect of penalties .