Country's richest hit with €36m tax bill
A major Revenue crackdown on tax-avoidance schemes used by Ireland's richest people has clawed back more than €36m for the taxpayer in the past year.
The tax-avoidance team at Revenue's large cases division has agreed settlements with a number of high-wealth individuals - defined as those with net assets greater than €50m -recovering €36.6m in unpaid tax and penalties.
The unit is currently dealing with more than 430 cases as part of a clampdown on individuals and businesses who try to avoid tax through artificial loss relief schemes and artificial capital loss schemes.
Revenue has been specifically targeting high net worth individuals who have used sophisticated financial instruments, known as contracts for difference, to generate artificial losses.
The total losses generated by these schemes are estimated to be €550m, with avoided potential capital gains tax of €110m, Revenue officials confirmed to the Sunday Independent.
"Revenue has successfully settled a number of these cases. Specific anti-avoidance rules have been introduced to prevent the use of this scheme and other similar schemes," a Revenue official said.
Revenue deems artificial schemes to be "transactions which have little or no commercial reality but are intended to reduce, avoid or defer a tax or duty charge or to artificially create or increase a tax deduction".
Contracts for difference are best-known in Ireland as the financial device used to bet on the former Anglo Irish Bank's share price, with disastrous results. They came to prominence in 2008 after the family of Ireland's then-richest man Sean Quinn built up a 28pc stake in the bank between 2006 and 2008 using the instruments.
"Revenue's policy is to actively challenge tax-avoidance transactions and to litigate such cases in the courts," said a spokesperson.
"Dedicated anti-avoidance units in Revenue's large-cases division are focussed on monitoring and challenging potential tax-avoidance transactions generally and, in particular, tax avoidance that may be undertaken by high-wealth individuals."
The rules around tax avoidance, as distinct from tax evasion, were tightened in the 2014 Finance Bill.
A separate Revenue crackdown on a tax-avoidance scheme used by individuals with companies located in the British Virgin Islands is targeting a €37m clawback for Irish taxpayers.
The cases involve claims of artificial trading losses by an estimated 200 taxpayers in an attempt to shelter income from taxation using offshore companies.
Revenue's large-cases division has around 250 staff. It was set up as part of the restructuring of the Revenue Commission in 2003.
Sunday Indo Business