Pearse Doherty (Donegal, Sinn Fein)
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278. To ask the Minister for Finance the rationale for not including PRSI, excise and customs duties under general anti-avoidance rules; and if he will make a statement on the matter. [3050/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The general anti avoidance rule (GAAR) is set out in section 811C of the Taxes Consolidation Act 1997. The rule covers a number of taxes and duties including income tax, corporation tax, capital gains tax, capital acquisitions tax and stamp duty. The rule disallows a tax advantage which has arisen as a result of a tax avoidance transaction. It does this having regard to the substance of the transaction, rather than its legal form. This means that, for example, where artificial steps are put into a transaction with the intent of reducing the tax arising, those artificial steps are ignored. The GAAR will not apply where the transaction is a bona fide business transaction that was not arranged primarily to give rise to a tax advantage, or where there has not been a misuse or abuse of a provision.

Revenue acts as the collection agent for PRSI. The governance of PRSI is set out in Social Welfare legislation, not tax legislation. As such it would not be appropriate to apply the general anti avoidance rule to PRSI.

Given the nature of the charge to customs and excise, they do not lend themselves to transactions where the legal form will be significantly different to the substance of the transaction.

In addition, the Deputy might be interested to know that customs duties and excise in Ireland are largely governed by EU law through the Union Customs Code and Directive 2020/262/EC respectively. It is a tenet of EU law that practices which seek to abuse any EU law are prohibited. This is known as the abuse of rights principle. It looks at the “essential aim” of a transaction, similar to the general anti avoidance rule, which considers the “main purpose or one of the main purposes” of a transaction. Any aggressive practices that seek to avoid customs duties or excise can be challenged as falling foul of the abuse of rights principle.