Clare Daly (Dublin North, Socialist Party)
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To ask the Minister for Finance if he will confirm that Section 77 Finance Act (2011) (No 6 of 2011) relating to taxpayer confidentiality, was included following lobbying from the International Financial Services Centre; his views on whether this privacy provision will obstruct necessary oversight of multinational company tax evasion strategies; if he will confirm that this clause does not prevent a case specific application for access to data held by the Revenue Commissioners by the Office of the Director of Corporate Enforcement or Criminal Assets Bureau. [42333/12]

Michael Noonan (Limerick City, Fine Gael)
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The provisions of Section 77 of the Finance Act 2011 (No 6 of 2011) were proposed by the Revenue Commissioners to my Department and, following consideration by my Department and the Government, were accepted for inclusion in the Finance Bill. The purpose of the provision is to provide a firm legislative basis to the long-standing practice relating to the confidentiality of taxpayer information, both commercial and personal, held by Revenue. It was not introduced as a result of lobbying by either the International Financial Services Centre or any other party. Modern tax administration depends to a large extent on achieving a high level of voluntary compliance by taxpayers, and that in turn depends on a relationship of trust and openness between the taxpayer and Revenue in relation to information that is invariably private and, in the case of businesses, often commercially sensitive. That trust and openness can be undermined in the absence of clear statutory protections. In this regard Section 77 provides that taxpayer information may not be disclosed to third parties except in the circumstances specified in Section 77 or where it is expressly authorised by another enactment.

Before this provision was enacted, taxpayers relied on the protections in the Official Secrets Act, the Data Protection Acts and the statutory declaration made by Revenue officials in respect of income tax and corporation tax under Schedule D. In the absence of a specific legislative confidentiality provision, the Information Commissioner has commented that to a large extent it seemed that the basis for taxpayer confidentiality was Revenue’s equitable duty of confidence rather than a clear statutory entitlement, which was a matter of concern to the Revenue Commissioners.

The Revenue Commissioners, being highly conscious of the importance of the protection of citizens’ rights in this area, were rightly concerned to ensure that Ireland is in a position to ensure taxpayer confidentiality to the same extent as other jurisdictions. Many other tax administrations have statutory taxpayer confidentiality provisions in place.

Any impression that might be given that Ireland lacked a strong legislative basis for assuring confidentiality for taxpayer information could have adverse implications for the confidence that taxpayers (including foreign direct investors) have in the ability of the Irish tax system to maintain the required level of confidentiality for sensitive personal and commercial information.

Section 77 does not prevent case specific applications for access to data held by the Revenue Commissioners from being made available to the Office of the Director of Corporate Enforcement or the Criminal Assets Bureau for the purposes of the investigation by either of these bodies of a suspected criminal offence. In this regard the taxpayer confidentiality legislation not only sets out particular circumstances in which Revenue may disclose information but also contains provisions that enable the disclosure of information where other statutory provisions provide for this.

Section 77 will not obstruct necessary oversight of multinational companies or any other relevant entities. Indeed it complements other statutory provisions enabling information to be exchanged with our Double Taxation Agreement or Tax Information Exchange Agreement partners - which is vitally important to Ireland’s reputation in the international tax arena.