Michael McGrath (Cork South Central, Fianna Fail)
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77. To ask the Minister for Finance further to Parliamentary Question No. 67 of 16 November 2017, the penalties that will now apply to persons who come forward with a declaration after the 4 May 2017 deadline; and if he will make a statement on the matter. [49817/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the penalties to be applied in the case of persons who did not come forward by 4 May 2017 to make a qualifying disclosure and who have tax liabilities relating to offshore matters will be determined in accordance with Revenue’s Code of Practice for Revenue Audit and other Compliance Interventions.

The rate of penalty in a particular case is determined by reference to the category of default and whether the tax defaulter has cooperated fully with Revenue in resolving matters, and is applied to the difference between the tax properly payable and the amount, if any, actually paid. The penalty rates are detailed in the following table.

Penalties in Cases Where No Qualifying Disclosure is Made

Those penalty rates are substantially higher than the rates which apply in the case of qualifying disclosures. In the case of an unprompted qualifying disclosure relating to careless behaviour without significant consequences, a penalty rate of 3% applies where the tax defaulter cooperates fully with Revenue. A first unprompted qualifying disclosure concerning careless behaviour with significant consequences is liable to a penalty of 5%, and the penalty for a disclosure of this kind relating to deliberate behaviour is 10%, in cases where full cooperation is given.

Michael McGrath (Cork South Central, Fianna Fail)
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78. To ask the Minister for Finance further to Parliamentary Question No. 67 of 16 November 2017, the role of financial institutions regulated here in providing information to the Revenue Commissioners in respect of offshore income sources and assets; and if he will make a statement on the matter. [49818/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that there are a number of obligations placed on financial institutions to provide information to Revenue in respect of offshore income sources and assets.

Section 895 Taxes Consolidation Act (“TCA”) 1997 (with effect from 1 June 1992) places an obligation on intermediaries, including financial institutions, which act for or assist Irish residents in opening foreign bank accounts, to make an appropriate return to Revenue.  The following details must be provided for each resident: name and address, tax reference number, the name and address of the foreign bank account, the date on which the foreign account was opened and the amount of the deposit made in opening the account.

Section 896 TCA 1997 (with effect from 15 February 2001) ensures that investments in foreign investments, including foreign life policies, are subject to the same reporting requirements as investments in foreign deposit accounts. The reporting requirements under this section mean that intermediaries who act on behalf of Irish resident persons who invest in offshore products are required to automatically notify Revenue of the investment. For each investor, the following details must be provided: name and address, the tax reference number, a description of the relevant facilities provided, including a description of the offshore product concerned and the name and address of the person who provided the offshore product and details of all payments made by or to the person in respect of the offshore products. 

It may also be of interest to the Deputy that those regulated institutions also have reporting obligations in respect of domestic accounts. 

Section 891B TCA 1997 and associated regulations, which implement the obligations in the section, [Returns of Payments (Banks, Building Societies, Credit Unions and Saving Banks) Regulation 2008] places an obligation on financial institutions to make annual returns to Revenue.  The following information must be returned for each Irish resident account holder: name, address, date of birth (if on record), the account number, the amount of the interest or other profit type payment, and, where appropriate, the tax deducted from the payments (e.g. DIRT).  Irish financial institutions are required to make all reasonable efforts to return the tax reference number of the payee. 

Section 891B TCA 1997 and associated regulations, which implement the obligations in the section, [Return of Payments (Insurance Undertakings) Regulations 2011] places an obligation on insurance undertakings to make annual returns to Revenue.  The following information must be returned for each Irish resident policy holder: name, address, date of birth (if on record), the investment number associated with the policy and the value of the policy held.  The insurance undertaking is also required to make all reasonable efforts to return the tax reference number.

Section 891C TCA 1997 and associated regulations, which implement the obligations in the section, [Return of Values (Investment Undertakings) Regulation 2013] places an obligation on investment undertakings to make an annual reporting to Revenue.  The following information must be returned for each Irish resident unit holder: name, address, date of birth (if on record), the investment number associated with the investment and the value of the units held.  The investment undertaking is also required to make all reasonable efforts to return the tax reference number.

Irish regulated financial institutions must report certain details in respect of non-Irish residents to Revenue under the OECD’s Common Reporting Standard (as implemented by s.891F), the EU’s Directive on mandatory automatic exchange of information (as implemented by s.891G), and the US’s Foreign Account Tax Compliance Act (as implemented by s.891E).  These standards require that the following information is reported for each person: name, address, jurisdiction of tax residence, gross amount paid, account balance on the reporting date, details of accounts closed.  Unlike the annual domestic reporting obligations, date of birth and tax reference numbers are required fields in respect of reporting under the international standards. 

In addition I am advised by Revenue that it has various powers to seek information from Irish based financial institutions where it is deemed necessary as part of their investigations. These include the power, under section 906A of the TCA 1997, to issue a notice to a financial institution requiring information for the purpose of enquiring into a liability, and the power to apply to the Tax Appeals Commission to serve notice on a financial institution requiring it to furnish information concerning a taxpayer of a group taxpayers who may have failed to comply with the Taxes Acts under section 907 of the TCA 1997.

Section 908 of the TCA 1997 provides that Revenue may to apply to the High Court for an order requiring information from a financial institution including in respect of a group or class of persons whose individual identities are not known, and Revenue can also seek a District or Circuit court order to obtain information from a financial institution where there is reasonable suspicion that a Revenue offence is being ,has been or is about to be committed by virtue of section 908A of the TCA 1997.