TD criticises Revenue for not applying guidelines

Companies operating in Ireland have been obliged to provide a country of residence since 1999, according to the Revenue’s own guidelines which impose a daily fine for failing to provide the relevant details.

Under the Finance Act of 1999, all companies operating in Ireland, resident or non-resident, must provide Revenue with the name of the country in which they are registered.

Despite the provision already existing in law, Finance Minister Micheal Noonan decided to legislate in relation to stateless companies, as part of his three Rs approach to the tax system: Rate, reputation, and regime.

He said in the budget that he would be “bringing forward a change in the Finance Bill to ensure that Irish-registered companies cannot be ‘stateless’ in terms of their place of tax residency”.

In response to a parliam-entary question from Sinn Féin TD Pearse Doherty, Mr Noonan said there has been a provision in legislation from 1999 requiring new companies to state the country in which they are incorporated.

“While non-resident companies within the charge to Irish corporation tax are not required to indicate their country of residence in their annual corporation tax return, Section 882 of the Taxes Consolidation Act 1997 (which was introduced in Finance Act 1999) requires companies incorporated in the State to provide certain particulars to Revenue within 30 days of commencing to carry on a business,” he said.

“Particulars to be provided include the company’s name, registered address, place of business, date of commencement of the business, and, in the case of a company not resident in the State, the name of the territory in which it is tax resident.

“The purpose of this provision is to ensure that newly incorporated companies coming within the charge to Irish corporation tax are registered with Revenue for tax purposes,” he said.

Failure by a company to comply with the legislation can result in a €4,000 fine followed by a fine of €60 for every day the company is not compliant.

Mr Doherty said if Revenue actually complied with its own guidelines, Mr Noonan wouldn’t need to enact new legislation.

“With respect to Irish-registered non-resident companies, it appears that the Revenue has failed to monitor this well-known tax-avoidance scheme, failed to ask the right questions, and failed to meet their own guidelines.

“The Revenue’s guidance states that incorporated but non-resident companies must provide a country of residence,” he said.

Mr Doherty called on Mr Noonan to conduct a review of these types of companies to ensure they are tax compliant and to make public the number of such companies in existence, their value, and place of residency.

“The legislation proposed by the minister in the budget would not be needed and our reputation safeguarded if the Revenue had applied its own guidelines,” Mr Doherty added.