Monday 23 October 2017

Irish holders of Swiss bank accounts 'known to the taxman'

HSBC
HSBC
Shane Phelan

Shane Phelan

The taxman has been receiving details of bank accounts held by Irish citizens in Switzerland for the past year, the Sunday Independent has learned.

The revelation comes as the Revenue Commissioners faces scrutiny over its response to the HSBC scandal, after leaked documents showed the Swiss arm of the global banking giant facilitated customers who wished to evade tax.

Exchanges of information are taking place under a double taxation agreement negotiated by the previous Government, but which only came into operation in January of last year.

Under the little-known protocol, the Revenue can request information on bank accounts from Swiss authorities once it can demonstrate it has exhausted all sources of information available here.

A spokeswoman for the Revenue said that due to confidentiality provisions built into the agreement it was not possible to say how many people's accounts had been disclosed or if it had led to any tax evasion being uncovered.

However, she said it was considered a "tool in our armoury".

The agreement is unlikely to be helpful in historical investigations as it only covers information from January 2014 onwards.

But it is likely to act as a significant deterrent against the use of Swiss banking institutions for tax evasion in future.

The use of Swiss accounts by Irish citizens in elaborate tax evasion schemes is nothing new to the Revenue.

Documents seen by the Sunday Independent detail several large transfers from Ansbacher Cayman accounts to accounts in Switzerland between 1992 and 1997.

These transfers, the largest of which was IR£1,665,000 paid into a trust account, were uncovered during investigations in the late 1990s.

Negotiations on the protocol with the Swiss were completed five years ago but there was a considerable delay before it came into force.

Nevertheless, the agreement is considered a major achievement considering the traditionally secretive nature of the Swiss banking system.

It can only be used in situations where Revenue are seeking to advance ongoing investigations and there are safeguards built into it which do not allow for tax officials to go on "fishing expeditions" or to request information that is unlikely to be relevant to the tax affairs of a person or entity under investigation.

Revenue is currently facing questions about the adequacy of its investigation into the HSBC Switzerland affair and has been asked for a detailed report by the Dail Public Accounts Committee (PAC).

Irish tax officials received details of the HSBC accounts in 2010 after electronic records stolen by a former employee were seized by French authorities.

The records detailed deposits totalling €3.1bn linked to 350 clients associated with Ireland.

Revenue launched 33 investigations on foot of the information, with 20 of these cases resulting in settlements totalling €4.55m.

However, concern has been raised over why more money was not recouped.

TDs also want to know why HSBC was not prosecuted for facilitating tax evasion by certain Irish clients.

Revenue has insisted there was not sufficient admissible evidence to pursue the bank and that it had fully assessed and evaluated all of the information supplied by the French.

One tax defaulter, Tralee businessman John Cashell, was given explicit assurances by a HSBC employee that his Swiss account would not be disclosed to Irish tax authorities. He ended up making a settlement with Revenue for €102,000 last year.

PAC chairman John McGuinness said Revenue needed to make the extent of its investigation clear, as well as the level of resources which were given to it.

He also said the Revenue should have been proactive in providing information about the inquiry.

Committee member Joe Costello said there were "major questions to be answered".

He said: "The Revenue Commissioners would have had access to the information almost five years ago and have operated in private in all the investigations that have taken place. We do not know the extent of the investigations."

Sunday Independent

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