Sunday 17 November 2019

Michael Lowry has one charge dropped from income tax trial

Michael Lowry outside court Photo: Gareth Chaney
Michael Lowry outside court Photo: Gareth Chaney

Sonya McLean

Independent TD Michael Lowry has had a charge of delivering an incorrect income tax return for 2002 dropped.

Eight charges in relation to Mr Lowry's company Garuda Ltd, filing corporation tax for 2002 and 2006 remain before the jury at Dublin Circuit Criminal Court.

Judge Martin Nolan told the jury of three women and eight men that the first count on the indictment against Mr Lower has been withdrawn.

He agreed with Michael O'Higgins SC, defending Mr Lowry, that following legal submissions his team applied for “a direction of not guilty” and the State did not “oppose our application”.

Judge Nolan told the jury that he would be directing them later to find Mr Lowry “not guilty by direction” against the charge.

The withdrawn charge stated that on October 21, 2003 Mr Lowry knowingly or wilfully delivered to the Collector General an incorrect income tax return for the year 2002.

It further stated that the said income tax return was incorrect insofar as it failed to reflect or account for the sum of Stg£248,624.00 (€372,000) which had been obtained by Michael Lowry from Garuda Limited and as such ought to have been declared as income, profit or gained earned by him during the said tax year.

Earlier in the trial Henry Oliver, in the investigation unit of Revenue, told the jury that he looked into the €372,000 payment in August 2013 and assessed it as an emolument (a wage or salary) earned by Mr Lowry.

He said on that basis he determined that Mr Lowry owed income tax on the figure and Garuda PAYE and PRSI on the sum. He assessed the total owed to Revenue, including penalties and fine, as being €1.1 million.

Mr Lowry's defence team didn't accept that the €372,000 constituted an income but rather said the money was owed to the company as commission from Norpe.

The jury heard that both Michael Lowry and Garuda Ltd successfully challenged the Revenue assessment before the appeals commission in April 2015. The assessment was reduced to nil meaning that neither Mr Lowry nor Garuda owed anything to Revenue.

The jury heard Mr Lowry's testimony before the appeals commission in which he stated “I refute the suggestion that I 'constructed this situation” and that I made a profit from this transaction. It wasn't a salary to me or a payment to me.”

“It was me calling in my director's loan at a time when I needed it,” Mr Lowry told the appeals commission, referring to the fact that he said he had lent Garuda money in the past.

“The nub of the issue is it should have been recorded in 2002 when it wasn't. I can be accused of all sorts of things but the bottom line is it was a genuine mistake,” he continued.

The jury heard that Revenue was at a loss of €5,541 by Garuda not paying corporation tax on the €372,000 until 2006.

A final figure of €29,000, including penalties and fines, was deemed due by Revenue and that this was paid by Mr Lowry's company, Garuda Ltd, in 2013.

It is the State's case that Mr Lowry's company, Garuda Ltd, received €372,000 in commission from Norpe OY, a refrigeration company based in Finland, in August 2002.

It is alleged that Mr Lowry arranged for this payment to be made to a third party, Kevin Phelan, residing in the Isle of Man, and therefore it didn't appear in the company accounts for that year.  It is further alleged that the accounts were then falsified in 2007 to reflect that the payment was received in 2006.

At the start of the trial Mr Lowry (64) of Glenreigh, Holycross, Co. Tipperary, pleaded not guilty at Dublin Circuit Criminal Court to four charges of filing incorrect tax returns on dates between August 2002 and August 2007 in relation to a sum of Stg £248,624 received by his company, Garuda Ltd and one charge in relation to failing to keep a proper set of accounts on dates between 28 August, 2002 and August 3, 2007.

He further pleaded not guilty on behalf of Garuda Ltd to three similar charges in relation to the company's tax affairs and one charge of failing to keep a proper set of accounts on the same dates.

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