Revenue crack down on foreign property owners

The Revenue Commissioners are cracking down on the owners of foreign property in their relentless pursuit of tax evaders.

The authority said it is targeting the fringes of tax law where people try and put money beyond the reach of Revenue by investing it in overseas property to avoid paying tax on their rental income.

“Revenue has a prioritised focus on those sectors that traditionally have been susceptible to shadow activity,” a spokesperson said.

“The taxation of rental income has been and continues to be a focus for compliance areas in the selection of cases for intervention based on the presence of various risk indicators and other information.”

Revenue has begun sharing information with member states across the EU that includes land registry data allowing Revenue to build a clear picture of what Irish nationals own.

The spokesperson said: “Revenue’s overall approach to the shadow economy is underpinned by close consultation and co-operation with other agencies and other member states and Revenue receives information from other countries on a spontaneous basis and under mutual assistance agreements.

“This includes details of Irish owners of foreign property. Data sharing on this basis is on a continuous and ongoing basis.”

An Irish resident earning rental income from a foreign property could incur an income tax charge on their rental profits of 41%. That charge could be as high as €4,100 for every €10,000 earned.

Andrea McDonnell of said people with foreign properties have begun receiving letters from Revenue seeking payments.

“This directive has been around since Mar 2010 but it’s only now that we are seeing the results of the increased communication between the various authorities,” she said.

“Of late we have seen cases originating from Hungarian and German tax authorities. We understand that in these cases tax officials in each state have been in contact with the Revenue in Ireland to make them aware that these Irish resident individuals had rental properties in their countries.

“In some cases this communication has resulted in letters from the Department of Investigation and Prosecution in the Revenue to the people in question in relation to their Irish tax liabilities.”

Ms McDonnell urged anyone who has lapsed in paying their taxes on foreign properties to come forward.

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