Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 87:

In page 93, line 34, to delete “that” and substitute “a”.

Section 79 of the Bill introduces a new section, 811C, to the Taxes Consolidation Act, 1997. The purpose of subsection (5) of the new section is to make it clear that the Revenue Commissioners can challenge a transaction, both under the general anti-avoidance legislation contained in section 811C and by way of an alternative assessment under any other appropriate provision of tax legislation. The wording of subsection (5) in the Bill, as published, could be read as implying that the same Revenue officer must make an assessment under section 811C and by way of alternative assessment. This could give rise to difficulties, for example, where a Revenue officer who made an assessment by reference to section 811C has retired or passed away and another Revenue officer now wishes to make or amend an alternative assessment on that taxpayer in relation to the same transaction. The amendment makes it clear that the assessments can be made by two different officers. Needless to say, this does not mean that a taxpayer will be charged twice. The subsection makes it clear that only one of the assessments can become final and conclusive.

Amendment No. 88 also relates to the new section 811D introduced to the Taxes Consolidation Act, 1997 by section 79 of the Bill. Subsection (2) of section 811D defines a disclosable transaction for the purposes of the section. The effect of the transaction being disclosable is twofold. First, it cannot enjoy the benefit of the protective notification regime for which the section provides. Second, if a taxpayer makes a qualifying avoidance disclosure of the kind provided for in the section, the level of mitigation of the surcharge provided for is less than for other transactions. Broadly, a disclosable transaction is one which was disclosable under the mandatory disclosure regime. However, for the purposes of section 811D, an exception is made where a promoter of an avoidance scheme ought to have disclosed but did not disclose a transaction and, therefore, did not provide the taxpayer with the transaction number provided for in the mandatory disclosure legislation but the taxpayer discloses the transactions and co-operates with Revenue in giving details of the scheme and the promoter. In these circumstances, the transaction is not treated as disclosable for the purposes of section 811D and the taxpayer is allowed to make a protective notification and obtain the higher level of mitigation where a qualifying avoidance disclosure is made. The purpose of the amendment is to clarify the interaction between the timings involved in making a protective notification and those involved in taxpayers receiving a transaction number under the mandatory disclosure regime. The amendment ensures a taxpayer cannot avail of a protective notification simply by claiming that, at the time when the notice was made, he or she did not have a transaction number. If a transaction number is given to the taxpayer at any time before the date for filing the relevant return, no valid protective notification can be made.

Amendment No. 89 relates to the definition of protective notification and the new section 811D. This is a technical drafting amendment intended to make it clear that a protective notification must contain each of the four items of information set out in the definition.

Amendment No. 90 relates to subsection (4)(a) of the new section 811D, where it references section 811C(6). Paragraph (a) of section 811D sets out the consequences where a taxpayer has made a valid protective notification. These are that Revenue can carry out inquiries, make or amend assessments, etc., within the standard period for making inquiries. For income tax, it is four years from the end of the year in which the return was submitted. In addition, if Revenue considers that the transaction was a tax avoidance transaction and is successful in challenging it, no surcharge will be made and the interest on unpaid tax will only start to accrue from one month after the date on which Revenue makes or amends the assessment withdrawing or denying the tax advantage. There are no provisions in the tax Acts that impose a time limit on the collection or recovery of tax found to be due and payable. However, as originally drafted, there could have been some doubt as to whether this paragraph had placed a limit on when Revenue could collect or recover tax in situations where a taxpayer had made a protective notification. This amendment seeks to remove any such doubt.

Amendment No. 91 relates to subsection (4)(b) of the new section 811D. This paragraph deals with the situation where Revenue believes a notification is not valid, for example, because it was received late or did not contain all of the required information. Revenue may only make inquiries or make or amend an assessment on a taxpayer who makes a protective notification within the prescribed period for so doing. For example, for income tax or corporation tax, the period is four years after the year in which the return to which the assessment relates is filed. In the Bill, as published, paragraph (b) provides a taxpayer with an explicit right of appeal against Revenue making inquiries outside this time limit. The amendment provides the taxpayer with an explicit right of appeal against Revenue making or amending an assessment outside the time limit. Without this amendment, the taxpayer could only challenge an out-of-time assessment by way of judicial review.