Seán Canney (Galway East, Independent)
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162. To ask the Minister for Finance if he will consider changing the rules surrounding the repayment of income tax to ensure that persons who have overpaid tax for years can receive their tax back for more than the statutory limitation period of four years and ensure that a level playing field exists for members of the public given that the Revenue Commissioners can pursue underpaid tax going back for years and impose stiff penalties on top of the amounts accrued; and if he will make a statement on the matter. [44488/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 865 Taxes Consolidation Act 1997 (TCA) provides a general right to repayment of tax where a person has paid tax which is not due. Section 865(4) TCA provides that that right is subject to the making of a claim within a statutory limit of four years after the end of the chargeable period to which the claim relates. That statutory limit is binding on Revenue as well as on taxpayers. Determinations of the Tax Appeals Commission in differing appellant circumstances confirm that there is no discretion in the application of the four-year rule for claiming repayments.

Prior to the introduction of this provision there was no statutory right to repayment of tax, though a taxpayer could make a claim for repayment, or could sue for repayment under common law.

Revenue’s general right to raise assessments or make enquiries in relation to taxpayer returns is also subject to a four-year limit in most cases. However, as the Deputy states, in certain circumstances - for example where fraud or neglect is suspected or in the context of the application of general anti-avoidance rules - Revenue's right to raise assessments or make enquiries is not time limited. Previously, the general time limit on the raising of assessments by Revenue had been ten years.

The provision of a four-year time limit for Revenue raising assessments and making enquiries and for taxpayers to claim a repayment of tax creates parity between both positions. An increase in one limit would have to be considered in the context of corresponding increases in other time limits in order to preserve that parity.

When the four-year time limits were introduced in 2003 the then Minister for Finance stated he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer. I am satisfied that continues to be the position. I also believe it is appropriate that Revenue should be able to impose interest for late payment and penalties for filing inaccurate returns in cases where a return has been found to be deficient. This is an important dimension of supporting voluntary timely compliance and in ensuring an effective and proportionate response in the context of fraud or neglect or tax avoidance.

I have no plans to amend the four-year limit in section 865 TCA or to change Revenue’s right to raise assessments or make enquiries outside the four-year period, where appropriate.