Mr. Niall Cody:

In the context of the chapter, a lot of the avoidance cases are not actually perpetrated by the HWIs who are dealt with in that category. Some of them come in under that threshold. A common feature of an artificial loss is when someone has a significant gain of €10 million, for example, and he or she would be liable to pay capital gains tax of 33% on that in the normal course of events. Some people try to create a loss to shelter the gain and a series of very sophisticated financial transactions would take place over a small number of days. This would create a significant loss. It would create another gain that was not legally taxable under a particular provision. The person would shelter the real gain by means of the artificial loss. The artificial loss and the artificial gain would cancel each other out and the individual would end up with exactly the same amount of money but would try to get it tax free. We have challenged this and are now before the courts with some of the cases. I cannot talk about individual cases but it is on public record that we identified 28 cases where the amount of tax at risk was €110 million. We were successful in the High Court but our approach was judicially reviewed. It was appealed to the Supreme Court as a result of the judicial review. A lot of the detail was put on the record of the court. We have been successful in the Supreme Court, but that was dealing with the judicial review. A number of the people involved have gone to the High Court to challenge the constitutionality of the section on general anti-avoidance provision. Those cases still have to go through the tax appeal process, but some have settled. This was seven cases settled with a yield of €27 million. This is what we do and this is what the anti-avoidance teams do.

I am aware that the Chairman is very interested in the tax appeals process. When we identify a tax avoidance scheme it could be ten years before the case is brought to fruition. We might say it is tax avoidance but these people are very well resourced and very well advised. They are quite happy to go through the courts process. The prolonging of the payment may well be enough of an advantage for them.