Chapter IV

Anti-avoidance and Anti-evasion

17. —For the purpose of preventing the evading by persons ordinarily resident in the State of liability to tax—

(a) by the placing of money on deposit with different branches or offices maintained by or in connection with a trade or business in the ordinary course of which interest becomes payable or creditable in respect of that money and which is carried on by a person who is required by notice from the inspector given under section 175 of the Income Tax Act, 1967 , to make a return of interest paid or credited by him in respect of money received or retained by him, or

(b) by the making of false declarations under subsection (4) of the said section 175,

it is hereby enacted as follows:—

(1) Section 13 of the Finance Act, 1968 , shall not apply or have effect, in relation to any return of interest paid or credited referred to in the said section 175, where the return is of interest paid or credited during a year beginning on or after the 10th day of February, 1982.

(2) The said section 175 is hereby amended, as respects any interest paid or credited at any time after the passing of this Act—

(a) by the substitution in subsection (4) for “the person paying or crediting the interest shall not be required to include the interest in any such return.” of “the person paying or crediting the interest shall not be required to include the interest in any such return:

Provided that:

(i) if the person on whom the notice is served is not satisfied that the person who served the notice was ordinarily resident outside the State when the interest was paid or credited—

(A) there shall be given to the person on whom the notice is served an affidavit, made by the person who served the notice, stating his name and address and the country in which he was ordinarily resident when the interest was paid or credited, and

(B) if the person who served the notice was not beneficially entitled to that interest when it was paid or credited, the affidavit shall state, in addition to the particulars specified in paragraph (A), the name and address of the person who was so entitled and the country in which he was ordinarily resident when the interest was paid or credited, and

(ii) if the person on whom the notice is served is satisfied that the person who served the notice was not ordinarily resident in the State when the interest was paid or credited and, if the latter person declares in the notice, or in a subsequent notice served on the person on whom the first-mentioned notice was served, that he was not beneficially entitled to the interest when it was paid or credited, he shall, if the person so entitled (hereafter referred to as the ‘beneficial owner’) is ordinarily resident in the State, state in one of the notices aforesaid, or in a subsequent notice served on the person on whom the first-mentioned notice was served, the name and address of the beneficial owner.”,

and

(b) by the insertion after the said subsection (4) of the following subsection:

“(5) A person to whom subsection (1) applies—

(a) shall keep and retain any notice served upon him in accordance with subsection (4), and any affidavit that accompanied the notice, for a period of six years from the date of the service of the notice,

(b) shall, if requested in writing by the Revenue Commissioners to do so, inform the Revenue Commissioners, within the time specified in the request, whether a notice has been served upon him in accordance with subsection (4) by such person as is named, and whose address is stated, in the request, and

(c) shall, if requested in writing by the Revenue Commissioners to do so, furnish to the Revenue Commissioners, within the time specified in the request, such notice served upon him in accordance with subsection (4) as is specified in the request and the affidavit that accompanied that notice.”,

and the said subsection (4), as so amended, is set out in the Table to this subsection.

TABLE

(4) The foregoing provisions of this section shall apply to interest paid or credited on or at any time after the 6th day of April, 1962, and only to money received or retained in the State, and, if a person to whom any interest is paid or credited in respect of any money received or retained in the State by notice in writing served on the person paying or crediting the interest—

(a) declares that the person who was beneficially entitled to that interest when it was paid or credited was not then ordinarily resident in the State, and

(b) requests that the interest shall not be included in any return under this section,

the person paying or crediting the interest shall not be required to include the interest in any such return:

Provided that:

(i) if the person on whom the notice is served is not satisfied that the person who served the notice was ordinarily resident outside the State when the interest was paid or credited—

(A) there shall be given to the person on whom the notice is served an affidavit, made by the person who served the notice, stating his name and address and the country in which he was ordinarily resident when the interest was paid or credited, and

(B) if the person who served the notice was not beneficially entitled to that interest when it was paid or credited, the affidavit shall state, in addition to the particulars specified in paragraph (A), the name and address of the person who was so entitled and the country in which he was ordinarily resident when the interest was paid or credited, and

(ii) if the person on whom the notice is served is satisfied that the person who served the notice was not ordinarily resident in the State when the interest was paid or credited and, if the latter person declares in the notice, or in a subsequent notice served on the person on whom the first-mentioned notice was served, that he was not beneficially entitled to the interest when it was paid or credited, he shall, if the person so entitled (hereafter referred to as the “beneficial owner”) is ordinarily resident in the State, state in one of the notices aforesaid, or in a subsequent notice served on the person on whom the first-mentioned notice was served, the name and address of the beneficial owner.

18. —(1) In this section—

“authorised officer” means an inspector or other officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this section;

“books” means—

(a) bankers' books, within the meaning of the Bankers' Books Evidence Acts, 1879 and 1959, and

(b) records and documents of persons referred to in section 7 (4) of the Central Bank Act, 1971 ;

“financial institution” means—

(a) a person who holds or has held a licence under section 9 of the Central Bank Act, 1971 ,

and

(b) a person referred to in section 7 (4) of that Act;

“judge” means a judge of the High Court;

“person” (other than in the definition of “financial institution”) means an individual who is ordinarily resident in the State.

(2) Where—

(a) a person who, for the purposes of tax, has been duly required by an inspector to deliver a statement of the profits or gains arising to him from any trade or profession or to deliver to the inspector a return of income, fails to deliver that statement or that return to the inspector,

or

(b) the inspector is not satisfied with such a statement or return so delivered,

an authorised officer may, if he is of opinion that that person maintains or maintained an account or accounts, the existence of which has not been disclosed to the Revenue Commissioners, with a financial institution or that there is likely to be information in the books of that institution indicating that the said statement of profits or gains or the said return of income is false to a material extent, apply to a judge for an order requiring that financial institution to furnish the authorised officer—

(i) with full particulars of all accounts maintained by that person, either solely or jointly with any other person or persons, in that institution during a period not exceeding ten years immediately preceding the date of the application, and

(ii) with such information as may be specified in the order relating to the financial transactions of that person, being information recorded in the books of that institution which would be material in determining the correctness of the statement of profits or gains or the return of income delivered by that person or, in the event of failure to deliver such statement or return, would be material in determining the liability of that person to tax.

(3) Where the judge to whom an application is made under subsection (2) is satisfied that there are reasonable grounds for making the application, he may, subject to such conditions as he may consider proper and specify in the order, make an order requiring the financial institution to furnish the authorised officer with such particulars and information as may be specified in the order.

(4) Where a judge makes an order under this section, he may also, upon the application of the authorised officer concerned, make a further order prohibiting for such period as the judge may consider proper and specify in the order, any transfer of, or any dealing with, without the consent of the judge, any assets or moneys of the person to whom the order relates that are in the custody of the financial institution at the time the order is made.

(5) Every hearing of an application for an order under this section and of any appeal in connection therewith shall be held in camera.

19. —(1) Profits or gains shall be chargeable to tax notwithstanding that at the time an assessment to tax in respect of those profits or gains was made—

(a) the source from which those profits or gains arose was not known to the inspector,

(b) the profits or gains were not known to him to have arisen wholly or partly from a lawful source or activity, or

(c) the profits or gains arose and were known to him to have arisen from an unlawful source or activity,

and any question whether those profits or gains arose wholly or partly from an unknown or unlawful source or activity shall be disregarded in determining the chargeability to tax of the said profits or gains.

(2) Notwithstanding anything in the Tax Acts, any profits or gains which are charged to tax by virtue of subsection (1)—

(a) shall be charged under Case IV of Schedule D, and

(b) shall be described in the assessment to tax concerned as “miscellaneous income”,

and the assessment shall not be discharged by the Appeal Commissioners or by a court by reason only of the fact that the income should, apart from this section, have been described in some other manner or by reason only of the fact that the profits or gains arose wholly or partly from an unknown or unlawful source or activity.

(3) In this section “tax” means income tax, corporation tax or corporation profits tax, as appropriate.

(4) This section shall apply and have effect in respect of assessments to tax made on or after the passing of this Act.

20. —(1) (a) In this section—

“asset” includes any interest in an asset;

“limited interest” means—

(i) an interest (other than a leasehold interest) for the duration of a life or lives or for a period certain; or

(ii) any other interest which is not an absolute interest;

“minor child” means a child who has not attained the age of 21 years on the specified date and who has not married on or before that date;

“prescribed” means prescribed by the Revenue Commissioners;

“property” includes interests and rights of any description, and, without prejudice to the generality of the foregoing, includes—

(i) in the case of a limited interest, the property in which the limited interest subsists or on which it is charged or secured or on which there exists a right to have it charged or secured,

(ii) an interest in expectancy,

(iii) an interest or share in a partnership, joint tenancy or estate of a deceased person,

(iv) stock or shares in a company which is in course of liquidation,

(v) an annuity, and

(vi) property comprised in a settlement which the person concerned is empowered to revoke;

“settlement” has the meaning assigned to it by section 447 of the Income Tax Act, 1967 ;

“specified date”, in relation to a notice under subsection (2), means the date specified in the notice;

“tax” means income tax.

(b) For the purposes of this section the cost of acquisition to a person of an asset shall include—

(i) the amount or value of the consideration, in money or money's worth, given by him or on his behalf for the acquisition of the asset, together with the incidental costs to him of the acquisition or, if the asset was not acquired by him, any expenditure incurred by him in providing the asset, and

(ii) the amount of any expenditure incurred on the asset by him or on his behalf for the purpose of enhancing the value of the asset, being expenditure reflected in the state or nature of the asset at the specified date and any expenditure incurred by him in establishing, preserving or defending his title to, or to a right over, the asset.

(2) Where, for the purposes of tax, a person delivers to an inspector a return of income and the inspector is not satisfied with that return of income, the inspector may require—

(a) that person, by notice in writing given to him, and

(b) where that person and his spouse are, for the year of assessment to which the return of income relates, treated as living together for the purpose of section 192 of the Income Tax Act, 1967 , his spouse, by notice in writing given to the spouse,

to deliver to the inspector, within the period specified in the notice or within such further period as the inspector may allow, a return in the prescribed form of property which on the date specified in the notice is relevant property in relation to that notice and that person or his spouse shall, if required by further notice or notices in writing by the inspector, deliver to the inspector within such time, not being less than 30 days, as may be specified in such further notice or notices, a statement verifying such return of property together with such evidence, statement or documents required by the inspector in respect of such property or in respect of any property which the inspector has reason to believe to form part of the relevant property.

(3) (a) Relevant property in relation to a notice under subsection (2) means where the person to whom the notice is given—

(i) is an individual and the return of income concerned relates to income in respect of which he is chargeable to tax otherwise than in a representative capacity or as a trustee, all the property to which that individual is beneficially entitled on the specified date,

(ii) is the spouse of an individual by whom the return of income concerned was delivered, all the property to which the said spouse is beneficially entitled on the specified date,

(iii) is a person chargeable to tax in a representative capacity and the return of income concerned relates to income of a person in respect of which he is so chargeable, all the property to which that last-mentioned person is beneficially entitled and which gives rise to income in respect of which the first-mentioned person is chargeable to tax in a representative capacity or is property in relation to which the first-mentioned person performs functions or duties in such a capacity on the specified date, and

(iv) is a person chargeable as a trustee of a trust and the return of income concerned relates to income of the trust, all the property comprised in the trust on the specified date.

(b) Property to which a minor child of an individual referred to in subparagraph (i) or (ii) of paragraph (a) is beneficially entitled shall be included in that individual's return under this section where—

(i) the said property at any time prior to its acquisition by the minor child was disposed of by that individual whether to the minor child or not, or

(ii) the consideration for the acquisition of the said property by the minor child was provided directly or indirectly by that individual.

(4) (a) A return under this section shall contain particulars of the relevant property, including in relation to each asset comprised therein—

(i) a full description,

(ii) its location on the specified date,

(iii) the cost of acquisition to the person beneficially entitled thereto,

(iv) the date of acquisition, and

(v) if it was acquired otherwise than through a bargain at arm's length, the name and address of the person from whom it was acquired and the consideration, if any, given to that person in respect of the acquisition.

(b) A return under this section shall, in the case of an interest which is not an absolute interest, contain particulars of the title under which the beneficial entitlement arises.

(c) A return under this section shall be signed by the person by whom it is to be delivered and shall include a declaration by that person that it is, to the best of his knowledge, information and belief, correct and complete.

(d) The Revenue Commissioners may require the declaration mentioned in paragraph (c) to be made on oath.

(5) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column 2 thereof of “Finance Act, 1983, section 20 ”.

21. —(1) If, for any purpose of the Tax Acts, any person in whose name any securities are registered is so required by notice in writing given to him by an inspector, he shall, within the time specified in the notice, state whether or not he is the beneficial owner of the securities and, if he is not the beneficial owner of the securities or any of them, he shall furnish in respect of each person on whose behalf the securities are registered in his name—

(a) the name and address of such person,

(b) the nominal value of the securities so registered on behalf of the person and, in so far as the securities consist of shares in a company, the number and class of such shares, and

(c) the date on which each security was so registered in his name on behalf of the person.

(2) In this section “securities” includes—

(a) shares, stocks, bonds, debentures and debenture stock of a company (within the meaning of section 1 (5) of the Corporation Tax Act, 1976 ) and also any promissory note or other instrument evidencing indebtedness issued to a loan creditor (within the meaning of section 103 (7) of the Corporation Tax Act, 1976 ) of a company,

(b) securities created and issued by the Minister for Finance under the Central Fund (Permanent Provisions) Act, 1965 , or any other powers in that behalf him enabling, and any stock, debenture, debenture stock, certificate of charge, or other security, which is issued with the approval of the Minister for Finance given under any Act of the Oireachtas and in respect of which the payment of interest and the repayment of capital is guaranteed by the Minister for Finance under that Act, and

(c) securities of the government of any country or territory outside the State.

(3) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column 2 thereof of “Finance Act, 1983, section 21 ”.

22. —(1) In this section—

“business” means—

(a) a profession, or

(b) a trade consisting solely of the supply (which word has in this paragraph the same meaning as in the Value-Added Tax Acts, 1972 to 1983) of a service and includes, in the case of a trade part of which consists of the supply of a service, that part, and also includes, in the case of a trade the whole or part of which consists of the supply of a service which incorporates the supply of goods in the course of the supply of that service, that trade or that part, as the case may be;

“specified person”, in relation to a business, means—

(a) in case the business is carried on by an individual, that individual, and

(b) in case the business is carried on by a partnership, the precedent partner;

“tax reference number”, in relation to a specified person, means each of the following:

(a) the Revenue and Social Insurance (RSI) Number stated on any certificate of tax-free allowances issued to that person by an inspector, not being a certificate issued to an employer in respect of an employee of that employer,

(b) the reference number stated on any return of income form or notice of assessment issued to that person by an inspector, and

(c) the registration number of that person for the purposes of value-added tax.

(2) The specified person in relation to a business shall ensure that his tax reference number or, if he has more than one tax reference number, one of his tax reference numbers or, if he has not got a tax reference number, his full names and his address is or are stated on any document (being an invoice, credit note, debit note, receipt, account, statement of account, voucher or estimate relating to an amount of £5 or more) issued on or after the 1st day of September, 1983, in the course of that business.

(3) Schedule 15 to the Income Tax Act, 1967 , is hereby amended by the insertion in column (3) thereof of “Finance Act, 1983, section 22 ”.

23. —(1) In this section “the Acts” means—

(a) the Tax Acts,

(b) the Capital Gains Tax Acts,

(c) the Value-Added Tax Act, 1972 , and the enactments amending or extending that Act,

(d) the Capital Acquisitions Tax Act, 1976 , and the enactments amending or extending that Act,

(e) the statutes relating to stamp duty and to the management of that duty, and

(f) Part VI ,

and any instruments made thereunder.

(2) The Revenue Commissioners shall, as respects each year (being the year 1984 or a subsequent year), compile a list of the names and addresses and the occupations or descriptions of every person—

(a) upon whom a fine or other penalty was imposed by a court under any of the Acts during that year,

(b) upon whom a fine or other penalty was otherwise imposed by a court during that year in respect of an act or omission by the person in relation to tax, or

(c) in whose case the Revenue Commissioners, pursuant to an agreement made with the person in that year, refrained from initiating proceedings for recovery of any fine or penalty of the kind mentioned in paragraphs (a) and (b) and, in lieu of initiating such proceedings, accepted, or undertook to accept, a specified sum of money in settlement of any claim by the Revenue Commissioners in respect of any specified liability of the person under any of the Acts for—

(i) payment of any tax,

(ii) payment of interest thereon, and

(iii) a fine or other monetary penalty in respect thereof.

(3) Notwithstanding any obligation as to secrecy imposed on them by the Acts or the Official Secrets Act, 1963 —

(a) the Revenue Commissioners shall include in their annual report to the Minister for Finance, commencing with the report for the year 1984, the list referred to in subsection (2) for the year in respect of which the report is made, and

(b) the Revenue Commissioners may, at any time, cause any such list as is referred to in subsection (2) to be published in Iris Oifigiúil.

(4) Paragraph (c) of subsection (2) does not apply in relation to a person in whose case—

(a) the Revenue Commissioners are satisfied that, before any investigation or inquiry had been commenced by them or by any of their officers into any matter occasioning a liability referred to in the said paragraph of the person, the person had voluntarily furnished to them complete information in relation to and full particulars of the said matter, or

(b) the specified sum referred to in the said paragraph (c) does not exceed £10,000 or was paid on or before the 31st day of December, 1983.

(5) Any such list as is referred to in subsection (2) shall specify in respect of each person named in the list such particulars as the Revenue Commissioners think fit—

(a) of the matter occasioning the fine or penalty of the kind referred to in subsection (2) imposed on the person or, as the case may be, the liability of that kind to which the person was subject, and

(b) of any interest, fine or other monetary penalty, and of any other penalty or sanction, to which that person was liable, or which was imposed on him by a court, and which was occasioned by the said matter.

(6) In this section “tax” means income tax, capital gains tax, corporation tax, value-added tax, gift tax, inheritance tax, residential property tax and stamp duty.