EU tip-offs on holiday homes to help nail tax cheats
REVENUE officials are using tip-offs from other EU authorities to chase down people who may be evading tax on foreign-owned properties.
Thousands of people bought overseas homes in the last 10 years, but it is suspected that many of these used undeclared income to buy the properties.
They are likely to owe income tax and capital gains tax.
A recently enacted European Union directive has allowed tax officials in EU states to share information. This means other states are telling Revenue about people they suspect of evading taxes.
Tax officials are also co-operating with their counterparts in other EU states to close in on people who have foreign properties but are not paying property taxes or rental income in the country where they bought.
The new directive allows other countries to appoint the Revenue here to collect the tax on behalf of their tax authorities. Christine Kiely of taxback.com said her firm recently dealt with a situation where German tax officials had asked the Revenue Commissioners to collect property tax here for an Irish person who owns a house in Germany but had failed to pay the local taxes.
The outstanding bill amounted to €6,000, she said.
It was the first time her firm had seen a situation where the Revenue was being asked to be a collecting agent on behalf of another EU country.
Some of the people identified by foreign tax authorities as owning property could end up being investigated by Revenue for taxes owed on earnings in Ireland, Ms Kiely added.
The number of foreign properties owned by Irish people is not known, but some estimates put it at 100,000 holiday homes.
The clampdown has resulted in huge tax demands, as interest and penalties are being added to the evader's bill.
"If you own property abroad and have not already taken care of your responsibilities in either or both countries, it is now more important than ever that you reconcile your position and submit the relevant forms and payments," Ms Kiely said.
She said that if people were not fully up to date with tax obligations, the best advice was to take action now before the Revenue authorities come to them.
"If an individual has been non-compliant in the past, interest and penalties can be mitigated if the initial approach comes from the individual rather than on foot of a demand notice from the authorities."
Overseas property expert Diarmaid Condon said Revenue was now stepping up its information-sharing with authorities in other EU states.
He said many people were now in a difficult position as they had bought properties with undeclared income dating back well over a decade.
A spokeswoman for the Revenue said it receives information from other countries on a spontaneous basis and under mutual agreements. "This includes details of Irish owners of foreign property," she added.