Budget 2017: Revenue get tougher on offshore accounts

Finance Minister Michael Noonan yesterday announced plans to tackle the use of offshore accounts to avoid paying tax, including a criminal offence, along with increased resources for the Revenue Commissioners.

“The Revenue Commissioners have a difficult but necessary job in securing the resources needed to fund the public expenditure that underpins our public services,” he told the Dáil. “It is a role that they perform very well but from time-to-time, as tax evasion evolves and tax issues become evident, the Revenue Commissioners seek additional powers and resources. The release of the so called ‘Panama Papers’ earlier this year showed how defaulters use offshore structures and accounts to avoid paying tax. International developments and agreements are leading to the better sharing of information.”

Mr Noonan said he would use the Finance Bill to “to restrict the opportunity for offshore defaulters to use the voluntary disclosure regime with effect from May next year” and will also introduce a new “strict liability criminal offence to facilitate the prosecution of serious cases of offshore tax evasion”.

He also said that an additional €5 million would be allocated to the Revenue Commissioners for the recruitment of 50 additional staff and investment in systems and equipment. The Department of Finance said it expects the offshore tax evasion measures to yield some €30m for the State. It said the yield will be achieved by applying analytics techniques to new data sources available through exchanges of information between the US’ Foreign Account Tax Compliance Act, the EU and the OECD.