Making a Qualifying Disclosure of an Offshore Related Tax Default to Revenue

Table of Contents

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Introduction

This booklet sets out, in a series of questions and answers, the issues arising for persons holding offshore accounts and the steps involved in making a qualifying disclosure. It gives general information and guidance about making a qualifying disclosure but it does not cover all possible situations, nor should it be regarded as an interpretation of tax law or the Code of Practice for Revenue Auditors.

It includes calculation sheets (which show the rates of income tax, levies, interest and penalty) for all years to assist in calculating any tax due. Worked examples set out the method for computing the tax due for two different years where offshore income was not declared for tax.

You may need to consult a professional advisor if you are unable to work out the tax, interest and penalty you owe.

Revenue staff will give assistance if possible but cannot compute your liability for you.

The three most common errors made in calculating tax due are:

  1. A credit for DIRT cannot be claimed on interest earned offshore - see "Do I get a DIRT credit for interest earned offshore?"
  2. Tax is due at an individual's marginal rate, not at the standard rate - see "Do I only pay tax at the standard rate on offshore deposit interest? "
  3. The increase in value of offshore investments and bonds is liable to Income Tax and not Capital Gains Tax. There is no annual exemption on the increased value and indexation does not apply. See "My money is in an offshore fund. What is the tax treatment? "

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Key Dates

If a letter issued to you from an offshore financial institution stating that the Revenue Commissioners were initiating an investigation, your key dates are:

  • 29 March 2004 to submit your Notice of Intention to Make a Qualifying Disclosure
  • 10 June 2004 to pay your liability and submit your Statement of Disclosure

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Frequently Asked Questions

Tax Implications of Offshore Accounts and Financial Products

What is the difference between an offshore account and a bogus non-resident account?

An offshore account is an account, which is held in a bank or branch outside the State.

A bogus non-resident account (or "BNR"account) is an account held in a bank or branch in the State but a false address outside the State is shown as the address of the account holder. For example the real address is O'Connell St, Dublin but the address shown on the account is Main St, Manchester.

Is it illegal to have an offshore account?

No, it is not illegal to have an offshore account but you must pay tax on any interest, income or gains earned on the account. Also, money placed in offshore accounts must be declared for tax.

A letter issued to me from an offshore financial institution. It relates to money I put offshore and suggests I contact Revenue about my tax affairs. Do I have a tax problem?

If all the money you put offshore was declared for Irish tax purposes, and you have declared all foreign income or gains on your tax returns, you have no further liability. However, it is still advisable to write to Revenue, stating that you have received a letter from your financial institution but indicating that the account and the money in it have been declared for tax purposes.

If the offshore money was not declared to date, and you have not declared any income or gains you have made abroad, it is very likely that you have a liability. This is called a "tax default". In these circumstances, you are strongly advised to make a qualifying disclosure to the Revenue Commissioners' Offshore Assets Group (OAG).

Please see explanation of the term "qualifying disclosure".

[If you have opened an offshore bank account or other financial product with previously taxed or non-taxable money, but have not earned any income on the account or financial product itself, you have no tax liability. However, you should have filed a tax return to declare the opening of the account or acquisition of the financial product. You should contact Revenue to do this if you have not already done so.]

A letter issued to me and I want to tell Revenue about my money offshore and pay what I owe. What should I do?

There are two stages and two dates in this process.

First, you must give notice of your intention to make a qualifying disclosure. Revenue must receive this by 29 March 2004.

Second, you must submit your statement of disclosure, including a tax computation, a payment and a declaration. The deadline for submitting the Statement of Disclosure has been extended to the 10 June 2004.

Why should I do this?

Because you will receive the benefits of making a qualifying disclosure. After the 29 March 2004 deadline, you will no longer qualify for these benefits. See qualifying disclosure for further details.

How much do I owe?

The answer to that question will vary in every case. It depends on how much money is undeclared and under which "taxhead" (Income Tax, VAT, Capital Acquisitions Tax, etc.) the money is treated. If you previously lived abroad and moved to Ireland, part of the money may not be taxable here. The longer it has been since you failed to declare the money, the more statutory interest will be payable. The circumstances of your case will also determine the penalty payable.

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Qualifying Disclosure

What is a "qualifying disclosure"?

This is a type of voluntary disclosure. A taxpayer makes a voluntary disclosure by freely disclosing a tax default to Revenue, rather than Revenue discovering it through an investigation.

It is a qualifying disclosure if it falls within the conditions specified in the Code of Practice for Revenue Audit, this is also available from your local Revenue office. For your disclosure to be "qualifying" it must be in writing and you must provide details of the source of the undeclared money, a computation of the tax, interest and penalty due, and a declaration that the disclosure is complete. See Statement of Disclosure.

What benefits do I get from making a qualifying disclosure?

The benefits you receive from making the disclosure are:

  1. The Penalty for underpaid tax may be substantially mitigated;
  2. Your name and settlement amount will not be published by Revenue in the quarterly list of tax defaulters in Iris Oifigiúil;
  3. If the disclosure if valid, Revenue will not seek to initiate an investigation with a view to Prosecution.

You must still pay the tax, interest and mitigated penalty due.

Can everyone with money offshore make a qualifying disclosure?

If you are not currently under Revenue investigation, you may make a qualifying disclosure. You are precluded from making a qualifying disclosure if you were or are the subject of a Revenue investigation, for example

  • you held a bogus non-resident ("BNR") account,
  • an Ansbacher account,
  • a National Irish Bank/Clerical Medical Insurance ("CMI") offshore financial product,
  • an Irish Permanent International / Irish Permanent Isle of Man account, or a trust administered by that company,
  • a trust administered by Bank of Ireland Trust Company (Jersey) Ltd.,
  • or you have come or may come under investigation arising from the Moriarty or Flood/Mahon tribunals.

You should still come forward, but the benefits associated with making a qualifying disclosure are not available to you.

You can also make a qualifying disclosure of a tax default unrelated to offshore matters at any time, provided you are not precluded from doing so because you are in one of the categories mentioned above. You can make such a disclosure to your local Revenue District.

Can companies which held undisclosed offshore accounts or financial products make a qualifying disclosure?

Yes, corporate holders of undisclosed offshore account can make a qualifying disclosure.

What if the company does not hold an offshore account but a director of the company holds the account, which has been funded by untaxed moneys extracted from the company?

Revenue is following the practice used in dealing with Bogus Non-Resident (BNR) account holders. If the company is not precluded from making a qualifying disclosure (see above), it can make a qualifying disclosure where an offshore account or financial product was held by a director of the company and the account was funded by untaxed moneys extracted from the company.

The company must

  • calculate the amount of its undisclosed liabilities and
  • disclose and pay that amount as if the company were the account holder.

The offshore account or product disclosed in completing the Statement of Disclosure will be the account or product held in the name of the director. This should allow directors and their companies to deal comprehensively with undisclosed tax liabilities, where both corporate and personal liabilities arise.

What if I don't come forward to disclose my offshore account before 29 March 2004?

Revenue is receiving information about offshore tax evasion from sources inside and outside the State and now has powers to obtain information from financial institutions and other sources by making an application to the High Court. We also receive information from other jurisdictions about foreign assets held by Irish citizens. All this information will be examined. When Revenue discovers that a person with an offshore account has failed to make a voluntary disclosure before 29 March 2004, that person will be vigorously pursued for unpaid liabilities. The monetary penalty will not be mitigated. The individual's or company's name will be published in the list of tax defaulters in Iris Oifigiúil, if the settlement figure is over €12,700. The individual or company also becomes a likely candidate for criminal prosecution for tax evasion.

How do I make a qualifying disclosure?

You should complete the form headed pdfNotice of Intention to Make a Qualifying Disclosure of an Offshore Tax Default (PDF, 346KB) and post it to:

Office of the Revenue Commissioners,
Investigations and Prosecutions Division,
Offshore Assets Group,
Block D,
Ashtowngate,
Navan Road,
Dublin 15.

The person who held the offshore account is deceased. May the executor or administrator make a qualifying disclosure?

Yes - if the offshore account holder is deceased, the executor or administrator should make a qualifying disclosure and pay any liabilities in respect of which the executor or administrator is assessable in respect of the estate of the deceased.

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Statement of Disclosure

What's the next step after making a qualifying disclosure?

You must then submit your statement of disclosure to Revenue by 10 June 2004.

What should the statement of disclosure contain?

The statement of disclosure should contain a tax computation, a payment, and a declaration.

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Tax Computation

Will I have to file tax returns? What if I have already filed a return for a year when I did not disclose an account?

Unless there are exceptional circumstances, you will not have to file tax returns when making a qualifying disclosure, whether or not you previously filed returns for a year when you failed to declare money offshore. A tax computation, as outlined below, will be acceptable.

What is involved in the tax computation?

There are four elements to the computation - the undeclared money; the tax and PRSI/levies due on this money; the statutory interest due for late payment of the tax; and a "tax-geared" penalty.

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Undeclared money

What is the "undeclared money"?

The first thing to be determined for your computation is how much money you have not previously declared for tax purposes. You should declare EVERYTHING previously undisclosed, not just the money offshore. Remember to include the money put offshore, not just the interest or gains accumulated while the money was offshore. The undeclared money should be categorised - was it income from a trade, profession or investment; or a gain from the sale of an asset; or a gift or inheritance? The category into which it falls determines how the money is taxed.

Am I entitled to any deductions in calculating this undeclared money?

Revenue is following the practice used in dealing with Bogus Non-Resident (BNR) Account holders. Taxpayers with untaxed relevant earnings (not investment income, gains, gifts or inheritances) in tax years up to and including 1989/90 can put 15% of such earnings into a pension fund. This reduces the amount of income on which income tax must be paid. This applies to undeclared earnings up to 1989/90 only - not to subsequent undeclared earnings. You will have to provide proof that you have paid into a pension fund.

Otherwise, in calculating the undeclared income, gains, gifts or inheritances, you can claim deductions permitted under the Taxes Consolidation Act 1997, the Value Added Tax Act 1972, the Stamp Duty Consolidation Act 1999, or the Capital Acquisitions Tax Consolidation Act 2003, as appropriate, but you will have to show you are entitled to make these deductions.

No tax is due on the money I put offshore. How do I prove this?

Please provide documents showing the source of the funds or whatever evidence is available to prove that they are not taxable.

My money is in a bond offshore, which matures or matured on a certain date. When is that taxable?

The bond is taxable when it matures. For instance, if it is a five-year bond, invested in 1997 and maturing in 2002, the growth on the bond is taxable (as income) in 2002. If it matured in 2003 the income should be declared on a tax return and the tax paid before 31 October 2004. If the money invested in the bond was not declared and taxed, it is taxed in the appropriate tax period.

My money is in an offshore fund. What is the tax treatment?

A tax charge arises on any payment out of the fund, if the fund has risen in value. Unless the fund pays out over 85% of its income every year and is certified by the Irish Revenue Commissioners as a distributing fund, any increase in its value is treated as your income in the tax year when you receive a payment (not as a capital gain) in the tax year when you receive a payment from the fund, and is taxed at your marginal rate of income tax, plus levies and PRSI as appropriate. If the money invested in the fund was not declared and taxed, it is taxed in the appropriate tax period.

What if I can't get full information about how much money I did not declare?

Where records are not available for earlier periods, estimates which can be shown to be best estimates based on reasonable assumptions in all the circumstances should be used to ensure that liabilities are calculated, disclosed and paid by the 10 June 2004 deadline.

Provided reasonable assumptions are used in the calculations, problems should not arise in the course of any future inspection by a Revenue auditor. Benefits will be retained

  • as respects the disclosure made and
  • as respects additional amounts, if any, to be paid in respect of adjustments and corrections.

Calculation errors which are not significant will not invalidate the benefits of disclosure and payment.

I have always been a PAYE taxpayer, but I opened an offshore account and did not declare the interest to Revenue. How do I work out what I owe?

You will have to establish your income in all years when you earned interest on the offshore account - that should be available on your P60. If you do not have your P60 for the year or years in question, you should ask your employer or your local Revenue District to assist you. The rate of tax will depend on your income and allowances and/or credits in those years.

Will Revenue calculate the figures for me?

No. For a qualifying disclosure to be valid, the person making the disclosure must provide a full computation of tax, interest and penalty. Revenue staff will give assistance where possible by providing information about tax rates, rate bands, thresholds, etc. You may wish to consult a professional advisor to assist you.

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Foreign Pensions

I am resident in Ireland and in receipt of a pension from the UK. Is this taxable in Ireland or in the UK?

Up to and including the 1998/99 tax year, a pension paid relating to services rendered to the United Kingdom or a political subdivision or local authority thereof in the discharge of functions of a Governmental nature is only taxable in the UK if the recipient is a UK national or holds dual nationality. If the recipient holds only Irish nationality then the pension is taxable in Ireland if the individual is resident in Ireland but a credit is available for any UK tax paid.

From the 1999/2000 tax year onward, if the pension relates to services rendered to the United Kingdom or a political subdivision or local authority thereof in the discharge of functions of a Governmental nature and the recipient is a UK national but not an Irish national, the pension is only taxable in the UK. If, however, the recipient is a resident and national of Ireland then the pension is only taxable in Ireland.

All other UK pensions received by an Irish resident for whatever period, whether occupational or social welfare, are only taxable in Ireland.

I am resident in Ireland and in receipt of a pension from the USA. Is this taxable in Ireland or in the USA?

Up to and including the 1997/98 tax year, US pensions paid to an Irish resident relating to services rendered to the United States in the discharge of functions of a Governmental nature, received by a US citizen or an individual holding dual nationality were only taxable in the US, and not taxable in Ireland. If the recipient held only Irish nationality, the pension was taxable in Ireland, but a credit is available for any US tax paid.

From the 1998/99 tax year onwards, if the pension relates to services rendered to the United States of America or a political subdivision or local authority thereof in the discharge of Governmental functions, and the recipient is a US citizen but not an Irish citizen, the pension is only taxable in the USA. If however, the recipient is a resident and citizen of Ireland then the pension is only taxable in Ireland.

Up to and including the 1997/98 tax year, US Social Security pensions received by Irish residents were not treated as taxable in Ireland. From the 1998/99 tax year onwards, such pensions received by Irish residents are taxable only in Ireland and not in the USA.

All other US pensions received by an Irish resident are generally taxable only in Ireland.

Is a person in receipt of a foreign pension entitled to claim the PAYE tax free allowance or tax credit?

If the pension is a social security pension from another EU country, the Irish resident recipient can claim the PAYE allowance or credit.

If the pension is an occupational pension, whether from a EU country or non-EU country, the Irish resident recipient can claim the PAYE allowance or credit where the occupational pension is chargeable to tax in the country in which it arises and is subject to a tax deduction system similar in form to our PAYE system.

If the pension is a social security or similar pension from a non-EU country, the Irish resident recipient cannot claim the PAYE allowance or credit, unless s/he is entitled to claim it in respect of another source of income.

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Tax, PRSI and Levies Now Due

What about the tax and PRSI/levies due?

After working out how much you did not declare, you then work out the tax due on this money.

  • If the money is income you did not declare, it will be subject to Income Tax, PRSI and levies.
  • If you failed to declare income from a VAT-able activity, you will also have to pay Value Added Tax.
  • If you failed to declare a gain on the disposal of an asset, you will be liable to Capital Gains Tax.
  • If you failed to declare a gift or inheritance, you will be liable to Capital Acquisitions Tax.
  • Some taxpayers could be liable for other taxes such as Corporation Tax, Stamp Duty and Relevant Contracts Tax.

Do I get a DIRT credit for interest earned offshore?

No. All offshore financial products are based outside the State. Deposit Interest Retention Tax has not been deducted from any deposit interest accumulated by the account or other financial product, so you cannot have a DIRT credit to reduce your tax liability from this income.

Do I only pay tax at the standard rate on offshore deposit interest?

No. You are liable to tax (plus levies and PRSI, if appropriate) at your marginal rate on the account. In other words, if you paid tax at the higher rate in a year when you had offshore deposit interest, you pay tax on that income at the higher rate. If you pay tax at the standard rate in a particular year, you pay tax at that rate on the offshore deposit interest until your income exceeds the threshold for the next rate band.

Are levies and PRSI due on offshore income?

PAYE and self-employed taxpayers are liable to pay levies (health contribution, youth employment levy, income levy, etc.) on offshore income if they are under age 70 and their income is over the minimum threshold in the tax year. Taxpayers over the age of 70 do not have to pay levies. [NB - if you are now over 70, but were under 70 in any year when you did not declare offshore income, levies were payable then and should be paid now.]

Self-employed taxpayers under age 66 are liable to pay PRSI on offshore income. Up to the tax year 2000/2001 there was an upper threshold for PRSI for the self-employed. This was abolished with effect from 6 April 2001, so from that date they are liable to PRSI, as well as levies, on all income. Taxpayers over the age of 66 do not have to pay PRSI. [NB - If you are over 66 but were under 66 in any year when you did not declare offshore income, PRSI was payable then and should be paid now.]

Statutory interest and a tax-geared penalty are charged on previously unpaid PRSI and levies as well as on tax.

How are liabilities to be calculated where the director of a closely held company holds an offshore account or other financial product?

In such cases it may be difficult to determine whether the undeclared money was originally the company's money or the director's money. The most practical way to calculate the undeclared liabilities, including VAT, is to assume that the money and undeclared income belonged to the director, rather than the company, from the start. Any reasonable decision on this will not be challenged.

How are liabilities to be calculated where the money in an offshore account held by a director is treated as having been funded by untaxed money extracted from the company (i.e. it is not assumed to have always belonged to the director)?

"Untaxed money extracted" refers to a failure to pay any taxes due.

Money appropriated for the benefit of directors of a closely held company will normally be regarded as additional remuneration of the directors. The company will have a corresponding additional PAYE liability in respect of the remuneration and may also have a VAT liability in respect of undisclosed receipts. In calculating the PAYE liability of the company,

  • the remuneration will be treated as the amount extracted less any related amount of VAT now being paid, and
  • it will not be necessary to "regross" the remuneration by reference to the PAYE liability - that is, the amount taken out of the company (less the VAT) and put into the offshore account will be treated as the director's pay before tax, not after tax.

In such circumstances, no adjustment to the corporation tax liability will be treated as arising, whether to charge undisclosed receipts as profits or to deduct undisclosed remuneration from profits. The director may have other liabilities, including liability in respect of deposit interest.

Where the facts indicate that the funds are taken as a loan, the company may have an income tax liability under section 438 TCA 1997, formerly section 98 of the Corporation Tax Act 1976, and would most probably also have a corporation tax liability since the amounts taken would represent an understatement of income for corporation tax purposes. In addition, where the loan has been written off by the company the loan would be taxable on the individual as income.

Where, on the other hand, the facts indicate that the funds had been given as a distribution to the director, as a shareholder, there would be an additional corporation tax liability on the company and an income tax liability (with associated credits up to 5 April 1999) on the director.

In each case the company will be obliged to account for VAT, where due, on any undisclosed receipts.

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Statutory Interest

What is "statutory interest"?

Statutory interest is charged for late payment of tax, PRSI and levies. Statutory interest runs from the due date for payment in each tax period until the tax is paid. For Income Tax, payment is due by the preliminary tax date; different dates will apply to the other taxes. The statutory interest is a percentage of the tax (plus PRSI/levies) underpaid. It is currently charged at a rate of 0.0322% per day. Between 1 April 1998 and 31 August 2002 it was charged at 1% per month. Before 1 April 1998 it was charged at 1.25% per month. There is no cap on statutory interest.

Please note: "statutory interest" is the interest charged by Revenue; this is different from deposit interest, which is earned on a bank account.

My undeclared income goes back over 20 years. Do I have to pay 20 years worth of statutory interest?

Revenue is following the practice used in dealing with Bogus Non-Resident (BNR) Account holders. Income arising in years up to the beginning of the income tax self-assessment system in 1987-88 may be treated as income of that year. If the income was earned in 1980, for example, you can treat it as income of 1987/88, calculate the tax due on that income, and pay statutory interest on the unpaid tax at the rate applying to 1987/88.

NB- you can also choose to tax the money at the tax rates and bands applying in 1980, for example, but the statutory interest will run from 1987/88.

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Penalty

What is the penalty payable?

The penalty is described as tax-geared because it is not a fixed penalty, but a percentage of the tax (plus PRSI/levies) underpaid. There is no cap on the penalty.

What percentage of the tax will the penalty be?

If the tax default arose in a period ending on or before 5 April 1991 - that is, up to the tax year 1990/91 - by law, the penalty for underpaid tax cannot be mitigated. In those periods, therefore, the penalty is 100% of the tax due.

After that, the penalty can be mitigated for co-operation and for making a voluntary disclosure, depending on the type of tax default involved. Under section 1065 TCA the mitigation of penalties is at the discretion of the Revenue Commissioners.

The Code of Practice for Revenue Auditors, 2002 edition, defines three categories of tax default which will attract a penalty: "deliberate default", "gross carelessness" and "insufficient care". "Deliberate default" involves intent on the part of a taxpayer to breach her/his tax obligations. "Gross carelessness" is distinguished from "deliberate default" by the absence of indicators of intent, so that the default can be explained solely by carelessness. Where a tax default would normally fall into the "gross carelessness" category but the tax shortfall is less than 15% of the tax liability ultimately due for that tax type, the default falls into the "insufficient care" category. There is also a category of "innocent error", where a penalty will not be sought. See the Code of Practice for Revenue Auditors, for further details.

Revenue holds that the concealment of money offshore is a "deliberate default" - it is difficult to see how a taxpayer might lodge undeclared money in an offshore account purely through carelessness, rather than with the intent to evade tax. If a person not currently under investigation by Revenue makes a qualifying disclosure and co-operates with Revenue, for periods ending after 5 April 1991 the penalty can be mitigated to 10% of the tax now due. However, if a taxpayer or an agent considers that another penalty category may apply in particular circumstances, s/he should make a case to that effect, referring specifically to the terms of the Code of Practice.

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Interest and Penalties for Capital Acquisitions Tax

The money in the offshore account arose from a gift or inheritance on which Capital Acquisitions Tax (CAT) is payable. What statutory interest and penalties are due on the CAT?

Statutory interest is due on CAT at the same rate as other taxes. It is chargeable from the date the CAT fell due until the date it is paid. Under CAT legislation, Revenue may mitigate the interest to 100% of the tax unpaid or underpaid, depending on the circumstances of the case.

For gifts and inheritances received before 1 October 2003 but not declared or not wholly declared to Revenue, if a CAT return was not filed there is a fixed penalty of €2,535. If an incorrect CAT return was filed there will be a "tax-geared" penalty which can be mitigated on the same lines as penalties for other taxes. If the tax default arose in a period ending on or before 5 April 1991 - that is, up to the tax year 1990/91 - by law, the penalty for underpaid tax cannot be mitigated. In those periods, therefore, the penalty is 100% of the tax due. After that, the penalty can be mitigated for co-operation and for making a voluntary disclosure, depending on the type of tax default involved. If a person not currently under investigation by Revenue makes a qualifying disclosure and co-operates with Revenue, for periods ending after 5 April 1991 the penalty can be mitigated to 10% of the tax now due.

For gifts and inheritances on or after 1 October 2003 statutory interest is due together with a penalty as provided in the Code of Practice for Revenue Auditors. The penalty will be 10% of the tax owing. This tax-geared penalty will cover both any potential surcharge arising and any penalty arising from the non-submission or the submission of an incorrect return.

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Payment

How do I work out the total amount due?

To get the total you add the tax, statutory interest and penalty together, remembering to convert from foreign currencies and Irish Pounds into €s, where necessary.

How do I pay what I owe?

You may submit a bank draft or cheque made payable to the Revenue Commissioners. You can also transfer funds electronically to the Offshore Assets Group's bank account:

Sort Code: 90 00 17
Account Number: 18049750
Bank: Bank of Ireland
Branch: College Green, Dublin 2
Name of Account: Revenue Commissioners (OAG) Public Bank Account

Some of my offshore money is in another currency. What currency should I use when paying my liability?

The liability should be paid in €s. Please convert from the foreign currency into €s or Irish pounds, if that currency was still in use at the time the money was earned. Conversion rates for the major currencies are available. Look at pdf issue 22 (PDF, 330KB) of Tax Briefing and the Tax Briefing Supplements from

What if I can't pay the liability in full?

You must

  • make a full disclosure on the Statement of Disclosure form, and
  • give a full account of your circumstances, including ALL your assets and liabilities

In these circumstances, the form should be submitted well in advance of the 10 June deadline, so that Revenue has an opportunity to consider whether you are unable to pay the full liability as calculated.

You should also make a payment on account that is, pay a substantial portion of your liability. If you do, the rate of statutory interest will be fixed at the date the payment is received. If you do not make a payment on account, the rate of statutory interest will continue to rise on a daily basis until you do. You should explore options for paying the balance of the money.

Where

  • the extent of your ability to pay and the payment to be made are agreed and
  • the agreed payment is made

the treatment outlined in this leaflet will be applied.

The same requirements will apply where the inability to pay relates to liabilities in respect of which an executor or administrator is assessable in respect of the estate of a deceased offshore account holder.

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Find foreign currency exchange rate

The Central Bank website contains information on the daily exchange rate for the Irish pound and/or the € and major currencies since 1979, when the link with Sterling was broken. The information is available on downloadable spreadsheets. Central Banks exchange rate homepageExternal link.

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Declaration

What kind of declaration is required?

You should make a declaration in the following terms:

"I declare that, to the best of my knowledge, information and belief, all statements I have made in this disclosure are correct and complete." This Declaration is contained on the form headed pdfDisclosure and Statement of Amounts Due (PDF, 390KB).

Where do I send the Statement of Disclosure?

Please send it to the same address to which you send the Notice of Intention to Make a Qualifying Disclosure to arrive by 10 June 2004:

Office of the Revenue Commissioners,
Investigations and Prosecutions Division,
Offshore Assets Group,
Block D,
Ashtowngate,
Navan Road,
Dublin 15.

What if I can't obtain all the information or make a full payment by 10 June?

You should apply to OAG for an extension of the deadline, stating the reason(s) you need the extension and the additional time required. You should also make a payment on account of a substantial portion of the final liability. If the OAG regards the reason(s) as being good and sufficient, and the payment as satisfactory, it will agree to the request.

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After Making a Disclosure

What happens once I submit my statement of disclosure?

It will be referred to your local Revenue office for consideration. Your submission will be examined for accuracy, and a local Revenue official may contact you or your professional advisor with queries on particular matters.

Once the Revenue official is satisfied with your submission, he will recommend your offer in settlement for approval by more senior officials. The local Revenue District Manager can agree settlements up to €50,000. Settlements between €50,000 and €100,000 are referred to an Assistant Secretary for approval. For settlements over €100,000 the approval of a Revenue Commissioner is required.

What if I've made a mistake in my disclosure, or if I've under-estimated the tax, interest and penalty due?

If you've underestimated the amount payable, you will be liable to pay the balance - the additional tax, statutory interest and penalty. The percentage rates of statutory interest and penalty will stay the same, but the amounts will be higher because they will be based on a higher amount of tax.

Whom do I contact if I have any other questions?

Please ring the Offshore Assets Group (OAG) at this number: (01) 8277500

or write to:

Office of the Revenue Commissioners,
Investigations and Prosecutions Division,
Offshore Assets Group,
Block D,
Ashtowngate,
Navan Road,
Dublin 15.

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Working Out Your Liability

If you paid your tax at the higher or highest rate in all years when you had an offshore account and other undisclosed income, you will now be liable to pay tax at the high rate plus levies and PRSI on all your undisclosed income.

If you are in that position, you can use one of two worksheets we have provided.

The first one applies to PAYE taxpayers. Insert your undisclosed income for each tax year in the box provided, and multiply by the percentages shown, which represent the high rate of tax plus levies in each year. Then multiply the tax plus levies by the statutory interest and penalty rates shown for each year. Add your total liability for each year, convert from Irish pounds to €s (up to 2001), add the total for all years together, and you will have the amount payable. * Calculation spreadsheet for higher rate PAYE taxpayers (MS Excel, 22KB).

The second sheet shows the liability for higher rate self-employed taxpayers, who have a PRSI liability on their deposit interest for the tax years 2001 and 2002. * Calculation spreadsheet for higher rate self-employed taxpayers (MS Excel, 22KB)

* The above mentioned spreadsheets are currently being updated

It will be more complicated to work out your liability if part of your undisclosed income is taxable at the standard rate or lower rate of tax, and part is taxable at the higher rate. To assist you in doing the calculations, we have prepared a number of other worksheets.

You should use the tax computation worksheets to add up all your income for a particular year and the various tax-free allowances and/or tax credits you can claim, to calculate the tax due on your income, to deduct from this the tax you have already paid, and to calculate your tax, interest and penalty liability.

If your previously declared income was very low, and is still low after including offshore and other undeclared income, you may be below the exemption limit for a particular year and you will not be liable to pay tax on your income. If your income is slightly above the exemption limit, you may qualify for marginal relief.

The PRSI worksheet allows you to work out your liability for these payments. When you work out how much you owe, include the figures on the appropriate tax computation worksheet for that year.

The note on PRSI and levies gives details of how they apply to your undeclared income.

The calculation sheets on the following pages refer to Income Tax, PRSI and Levies. You may have liabilities arising under other taxheads, depending on how the money you did not declare should be treated for tax purposes see the answer to the question, What about the tax and PRSI/levies due? These other liabilities should be calculated as appropriate, and the figures for each tax year written on the pdfSummary Sheet (PDF, 341KB).

Information about the rates of tax, thresholds, bands, are available by clicking Information by Tax and Duty. If you need additional information the OAG will assist you.

The statutory interest and penalty will be charged on a similar basis as for income tax that is, the same daily and monthly rates of statutory interest apply, and the penalty will be charged at 100% for liabilities arising on or before 5 April 1991 or 10% of the tax on liabilities after that date. The date on which the tax is due will vary according to the taxhead.

You may wish to consult a professional advisor to assist you in calculating these liabilities. Revenue staff will provide assistance and information where possible but cannot calculate your liability for you.

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