THE
2010 Finance Act of Ireland will soon make it mandatory for certain
transactions with tax saving implications, to be reported to the Irish Revenue,
soon after they are first marketed or made available for use. The consultation
period prior to the introduction of this regulation, concluded on September 15,
2010. F The regulations are expected to be finalised before the end of October
for implementation later in the year.
Intended to complement the General Tax Avoidance Rules, the regulation is
expected to create a warning system whereby the Revenue department can obtain
early information on the design and marketing of certain types of transactions,
which may potentially encourage tax avoidance, eventually leading to a loss in
tax revenues. These regulations would primarily apply to promoters, including
tax advisers and banks who would report transactions that give rise to a tax
advantage. This information would enable the government to regulate or close
such schemes before significant damage is done.
The
regulations, still to be fine tuned for implementation, are an outcome of the
low acceptance of a voluntary disclosure scheme, introduced four years ago. Such
tax disclosures are already a part of the UK and Australian tax rules.
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