Friday 18 August 2017

Overhauled tax arrangements for large companies will create an elite class, warn practitioners

Brian Keegan, director of public policy and taxation, Chartered Accountants Ireland
Brian Keegan, director of public policy and taxation, Chartered Accountants Ireland
Samantha McCaughren

Samantha McCaughren

An overhauled Revenue Commissioners scheme which provides large businesses with a special arrangement, has drawn criticism from tax advisors for creating a two-tier tax system.

The Co-Operative Compliance Framework was introduced in 2005 with limited success by the Large Cases Division (LCD) .

However, following a review last year, Revenue has decided to relaunch a reformed version of the framework.

Brian Keegan, director of public policy and taxation at Chartered Accountants Ireland, warned against the initiative.

"Cooperative compliance is dangerous because it creates an elite class of taxpayers," he said.

"If one taxpayer is 'close to Revenue' then by definition, other taxpayers are not 'close to Revenue'. There is no place in a democracy for Revenue authorities to treat one taxpayer better than another."

However, Revenue said that co-operative compliance was seen as best practice internationally.

A review of such frameworks by Revenue found that large taxpayers want to be tax compliant, want certainty on their tax position, want no surprises, and, if things go wrong for non-fraud reasons, want to put things right quickly.

Revenue is now embarking on a soft relaunch of the scheme.

It has outlined the benefits which companies in the framework will be offered compared to those outside of the scheme.

Benefits of being part of the framework include having a dedicated case manager and fewer audits.

"No audit will be undertaken except in exceptional circumstances," a Revenue document on the plan said.

However, it was noted that an annual risk review meeting between taxpayer and Revenue would be crucial.

Some large case companies will not be eligible if they have made an audit settlement with Revenue within the past three years.

The LCD will issue letters this month inviting applications.

Sources said the old scheme was mainly adopted by the public sector rather than large businesses.

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