Written answers

Wednesday, 25 October 2017

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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109. To ask the Minister for Finance his plans to improve the rules on mandatory tax avoidance disclosure similar to the disclosure of tax avoidance scheme rules introduced by the British tax authorities which have allowed them to tackle promoters of aggressive tax structures. [45158/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The promotion and use of tax avoidance schemes, which are based in the main on transactions largely devoid of any commercial rationale, is an issue and challenge facing all tax administrations. A comprehensive general anti-avoidance rule was introduced by the Oireachtas as far back as 1989. The Deputy may be aware there is a requirement in the recent EU Anti-Tax Avoidance Directive for Member States to introduce a general anti-avoidance rule in their domestic law to take effect from 1 January 2019. This State has had a general anti-avoidance rule for nearly 30 years.

In order to assist Revenue in detecting avoidance schemes a mandatory disclosure scheme was introduced by the Finance Act 2010. The policy objectives underlying the introduction of the disclosure scheme were:

- to provide early information to Revenue about the schemes and how they purport to work,

- to provide information of the persons who availed of the scheme, and

- to afford Revenue an opportunity to recommend legislative change where it was considered necessary.

I have previously advised the Deputy of the number and the nature of the schemes disclosed to Revenue to date in my answer to PQ 39337/17. In general, the primary responsibility for making a disclosure lies with the promoter of the scheme. Where a promoter proposes a transaction where a tax advantage is expected to accrue, the main benefit or one of the main benefits of the transaction is obtaining a tax advantage, and the transaction falls with a specified description then, that transaction must be disclosed. A comprehensive guidance note on the operation of the provision has been prepared by Revenue and is available for review on their website at www.revenue.ie

In relation to the UK disclosure scheme I should advise the Deputy that, having regard to the broad similarities of the tax regimes in both jurisdictions, the mandatory disclosure scheme introduced by the Oireachtas in 2010 was closely aligned to the earlier Disclosure of Tax Avoidance Schemes (DOTAS) adopted by the UK. A review of the mandatory disclosure regime was carried out by Revenue in 2014 and changes were made to the scheme in Finance Act 2014 and by subsequent regulations which provided further clarity and strengthened the provisions.

Revenue, at present, is not requesting any amendments to the mandatory disclosure regime and therefore I am not proposing any changes for the moment. However, I am advised that the regime is kept under constant review by Revenue and developments in other jurisdictions are closely monitored. The promotion and use of egregious tax avoidance schemes is a modern day scourge and I will not hesitate to legislate to defeat such schemes which have at their heart an intention to frustrate the will of this House and the promotion of unfairness in our society.

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