Mr. Niall Cody:

We have been very proactive in tackling tax avoidance and we have three branches in our large cases division focusing permanently on tackling tax avoidance. We can provide the committee with summary data on the type of tax planning schemes we have come across. Tax planning is tackled in a number of ways. We need to identify the schemes and have the legislation. Sometimes, legislative change is the only solution. Ultimately, we have our general anti-avoidance provision, originally section 811 of the Taxes Consolidation Act 1997. Ireland was one of the first countries to have a general anti-avoidance provision. The UK has only recently introduced one. As part of the BEPS and EU approach, there is a need for a general anti-avoidance provision. The Deputy is right. When the law is changed, unintended consequences flow from the changes. Artificial losses are created and there is tax arbitrage between capital and income, to use the reduced rate that applies to capital taxes. All this process is on an ongoing basis.

The challenge in anti-avoidance is that the people involved are very well resourced. We are challenged. During recent years, the first challenge is not an appeal but a judicial review. Judicial review is the first port of call. Earlier this year, the Supreme Court found in our favour in a judicial review process of a significant tax planning scheme involving high-worth individuals, most of whom had sold significant businesses. The result of two to three years through the court process is we now are in a position where the appeal of the tax issue is only starting, and it could, potentially, go through the appeal process to the High Court, the Court of Appeal and the Supreme Court. It is a difficult and long-standing area. In the Comptroller and Auditor General's report, it is highlighted that some of the medical consultants' cases took more than four years to finalise. Those were the early cases. We had to get senior counsel advice.

Tax avoidance happens very much, in some ways, in the open. It has significant legal documentation. Tax evasion happens in the undergrowth. It is a significant job to challenge it. The Deputy's comments on the tax gap analysis are probably closer to our own than the recommendations about overall tax gap analysis. We are interested in focusing on segments where we can, hopefully, find not only what the gap is but where it is. While we did not do a tax gap analysis with oils, we did the opposite and looked back at it. We are trying to fine cases and, to use a verb that only we use, we try to operationalise the results. We did it with tobacco. We try to fine people.