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Finance Bill clamp down on tax dodges

Thursday, February 02 17:36:05

 

(BizWorld)

 

Finance Minister Brian Cowen today introduced a series of measure in the Finance Bill to clamp down on tax dodges and loopholes.

 

These include a provision to allow the Revenue to introduce regulations governing the automatic reporting to Revenue by financial institutions, accountants and auditors of interest and other profit payments made to customers as well as certain payments made by Government Departments.

There will be a 10pc penalty for undisclosed transactions that are determined to be tax avoidance transactions, though this will not apply when prior notice is given to Revenue.

 

 

The Minister also said he was closing off various tax loopholes in the areas of film leasing, transferring Irish assets into a foreign company, capital gains tax and VAT. There are also to be changes in the system under which principal contractors deduct 35pc from payments made to sub-contractors in the building, meat processing and forestry sectors. The amendments are aimed at discouraging fraud and tax evasion.

 

Minister Cowen also confirmed that he would scrap a tax which allowed workers resident here who were not domiciled here to pay less tax. The Government believes it has been losing E100m a year because of the scheme.

 

Some business interest groups had criticised the move, which was announced in the Budget. Under the scheme, individuals could leave some money offshore and were liable to Irish income tax only on income they left here.

 

There are also measures to boost the film industry, with 80pc of investments in film production now eligible for tax relief, up from the existing levels of 55pc and 66pc to 80pc. The ceiling for spending on one film is being increased from E15m to E35m. These measures will need EU approval.