Finance Act 2019
|
Mandatory automatic exchange of information in relation to reportable cross-border arrangements | ||
|
67. (1) Part 33 of the Principal Act is amended by inserting the following Chapter after Chapter 3: | ||
“Chapter 3A | ||
Implementation of Council Directive (EU) 2018/822 of 25 May 201814 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements | ||
Interpretation (Chapter 3A) | ||
817RA. (1) In this Chapter— | ||
‘arrangement’ means— | ||
(a) any transaction, action, course of action, course of conduct, scheme, plan or proposal, | ||
(b) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable or intended to be enforceable by legal proceedings, and | ||
(c) any series of or combination of the circumstances referred to in paragraphs (a) and (b), | ||
whether entered into or arranged by one or two or more persons— | ||
(i) whether acting in concert or not, | ||
(ii) whether or not entered into or arranged wholly or partly outside the State, or | ||
(iii) whether or not entered into or arranged as part of a larger arrangement or in conjunction with any other arrangement or arrangements, | ||
but does not include an arrangement referred to in section 826; | ||
‘associated enterprise’ has the same meaning as it has in Article 3(23) of the Directive; | ||
‘competent authority’ means the authority designated as such by a Member State for the purposes of the Directive and, in relation to the State, means the Revenue Commissioners; | ||
‘cross-border arrangement’ means an arrangement concerning either more than one Member State or a Member State and a third country where at least one of the following conditions is met: | ||
(a) not all of the participants in the arrangement are resident for tax purposes in the same jurisdiction; | ||
(b) one or more of the participants in the arrangement is simultaneously resident for tax purposes in more than one jurisdiction; | ||
(c) one or more of the participants in the arrangement carries on a business in another jurisdiction through a permanent establishment situated in that jurisdiction and the arrangement forms part or the whole of the business of that permanent establishment; | ||
(d) one or more of the participants in the arrangement carries on an activity in another jurisdiction without being resident for tax purposes or creating a permanent establishment situated in that jurisdiction; | ||
(e) such arrangement has a possible impact on the automatic exchange of information or the identification of beneficial ownership; | ||
‘Directive’ means Council Directive 2011/16/EU of 15 February 201115 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, as amended by Council Directive 2014/107/EU of 9 December 201416 , Council Directive (EU) 2015/2376 of 8 December 201517 , Council Directive (EU) 2016/881 of 25 May 201618 , Council Directive (EU) 2016/2258 of 6 December 201619 and Council Directive (EU) 2018/822 of 25 May 201820 ; | ||
‘electronic means’ has the same meaning as it has in section 917EA(1); | ||
‘hallmark’, ‘marketable arrangement’ and ‘person’ have the same meanings respectively as they have in Article 3 of the Directive; | ||
‘intermediary’ means any person— | ||
(a) that— | ||
(i) designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement, or | ||
(ii) having regard to the relevant facts and circumstances and based on available information and the relevant expertise and understanding required to provide such services, knows or could be reasonably expected to know that such person has undertaken to provide, directly or by means of other persons, aid, assistance or advice with respect to designing, marketing, organising, making available for implementation or managing the implementation of a reportable cross-border arrangement, | ||
and | ||
(b) that meets at least one of the following conditions: | ||
(i) the person is resident for tax purposes in a Member State; | ||
(ii) the person has a permanent establishment in a Member State through which the services with respect to the arrangement are provided; | ||
(iii) the person is incorporated in, or governed by the laws of, a Member State; | ||
(iv) the person is registered with a professional association related to legal, taxation or consultancy services in a Member State; | ||
‘reference number’ means the number assigned to a reportable cross-border arrangement by the Revenue Commissioners or by the competent authority of another Member State; | ||
‘Regulations of 2012’ means the European Union (Administrative Cooperation in the Field of Taxation) Regulations 2012 ( S.I. No. 549 of 2012 ); | ||
‘relevant taxpayer’ means any person to whom a reportable cross-border arrangement is made available for implementation, or who is ready to implement a reportable cross-border arrangement or has implemented the first step of such an arrangement; | ||
‘reportable cross-border arrangement’ means any cross-border arrangement that contains at least one of the hallmarks set out in Annex IV of the Directive; | ||
‘return’ has the same meaning as it has in section 917D(1); | ||
‘specified information’ means, in respect of a reportable cross-border arrangement, the information set out in subsection (3); | ||
‘tax advantage’ means— | ||
(a) relief or increased relief from, or a reduction, avoidance or deferral of, any assessment, charge or liability to tax, including any potential or prospective assessment, charge or liability, | ||
(b) a refund or repayment of, or a payment of, an amount of tax, or an increase in an amount of tax refundable, repayable or otherwise payable to a person, including any potential or prospective amount so refundable, repayable or payable, or an advancement of any refund or repayment of, or payment of, an amount of tax to a person, or | ||
(c) the avoidance of any obligation to deduct or account for tax, | ||
arising out of or by reason of an arrangement, including an arrangement where another arrangement would not have been undertaken or arranged to achieve the results, or any part of the results, achieved or intended to be achieved by the arrangement; | ||
‘taxpayer identification number’ means the tax identification number (TIN) allocated to a person by the tax administration of the jurisdiction of residence of the person and, in relation to the State, means a tax reference number within the meaning of section 885. | ||
(2) For the purposes of this Chapter, a person referred to in paragraph (a)(ii) of the definition of ‘intermediary’ in subsection (1) shall have the right to provide evidence that such person did not know and could not reasonably be expected to know that that person was involved in a reportable cross-border arrangement and, for this purpose, that person may refer to all relevant facts and circumstances as well as available information and that person’s relevant expertise and understanding. | ||
(3) The following is the information referred to in the definition of ‘specified information’ in subsection (1): | ||
(a) information in relation to the identity of each intermediary and relevant taxpayer, including— | ||
(i) the name of each such intermediary and relevant taxpayer, | ||
(ii) whether each such intermediary and relevant taxpayer is an individual or entity, | ||
(iii) the date and place of birth (in the case of an individual) of each such intermediary and relevant taxpayer, | ||
(iv) the residence for tax purposes of each such intermediary and relevant taxpayer, | ||
(v) the taxpayer identification number of each such intermediary and relevant taxpayer, | ||
(vi) the country of issuance of the taxpayer identification number of each such intermediary and relevant taxpayer, | ||
(vii) if the information referred to in either or both subparagraph (v) or (vi) is not known to the person who is required to make a return under this Chapter of the specified information, the address of each such intermediary and relevant taxpayer, and | ||
(viii) where appropriate, the persons that are associated enterprises to each such relevant taxpayer; | ||
(b) details of each hallmark that makes the cross-border arrangement reportable; | ||
(c) a summary of the content of the reportable cross-border arrangement, including the name by which it is commonly known, if any, and a description in abstract terms of the relevant business activities or arrangements, without leading to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information the disclosure of which would be contrary to public policy; | ||
(d) the reference number assigned to the reportable cross-border arrangement, if any; | ||
(e) details of the national provisions that form the basis of the reportable cross-border arrangement; | ||
(f) the value of the reportable cross-border arrangement; | ||
(g) the date on which the first step was taken or will be taken in implementing the reportable cross-border arrangement; | ||
(h) the identification of the Member State of each such relevant taxpayer and any other Member States which are likely to be concerned by the reportable cross-border arrangement; and | ||
(i) the identification of any other person in a Member State likely to be affected by the reportable cross-border arrangement, indicating to which Member States such person is linked. | ||
(4) A word or expression which is used in this Chapter and which is also used in the Directive has, unless the context otherwise requires, the same meaning in this Chapter as it has in the Directive. | ||
Application of Chapter 3A | ||
817RB.(1) Subject to subsection (2), this Chapter applies to all taxes of any kind levied by, or on behalf of, a Member State or its territorial or administrative subdivisions, including local authorities. | ||
(2) This Chapter shall not apply to— | ||
(a) (i) value-added tax, customs duties, or excise duties covered by other legislation of the European Union on administrative cooperation between Member States, or | ||
(ii) compulsory social security contributions payable to a Member State or a subdivision of a Member State or to social security institutions established under public law, | ||
(b) fees for documents issued by public authorities, and | ||
(c) consideration due under a contract. | ||
Duties of intermediary | ||
817RC. (1) An intermediary within the meaning of paragraph (a)(i) of the definition of ‘intermediary’ in section 817RA(1) shall make a return to the Revenue Commissioners of the specified information within 30 days beginning— | ||
(a) on the day after the reportable cross-border arrangement is made available for implementation, | ||
(b) on the day after the reportable cross-border arrangement is ready for implementation, or | ||
(c) when the first step in the implementation of the reportable cross-border arrangement was taken, | ||
whichever occurs first. | ||
(2) An intermediary within the meaning of paragraph (a)(ii) of the definition of ‘intermediary’ in section 817RA(1) shall make a return to the Revenue Commissioners of the specified information within 30 days beginning on the day after such intermediary provided, directly or by means of other persons, aid, assistance or advice referred to in the said paragraph (a)(ii). | ||
(3) In the case of a marketable arrangement, an intermediary shall— | ||
(a) when making a return under subsection (1) or (2), as the case may be (in this subsection referred to as ‘the return’), state in the return that it is a marketable arrangement, and | ||
(b) not later than 3 months after the date of the return and every 3 months thereafter, notify the Revenue Commissioners, by amending the return, of any new information that has become available in respect of the specified information referred to in paragraphs (a), (g), (h) and (i) of section 817RA(3). | ||
(4) A return (including an amended return under subsection (3)) required under this section shall be made by electronic means and the relevant provisions of Chapter 6 of Part 38 shall apply. | ||
(5) An intermediary shall provide, in writing, to any other intermediary and each relevant taxpayer involved in the arrangement, the reference number assigned to the arrangement by the Revenue Commissioners within 5 working days of the later of— | ||
(a) the date on which the intermediary is notified by the Revenue Commissioners of the reference number, or | ||
(b) the date on which such other intermediary or a relevant taxpayer becomes involved in the arrangement. | ||
(6) An intermediary shall be exempt from making a return to the Revenue Commissioners under this section if the intermediary has received, in writing, from any other intermediary involved in the same reportable cross-border arrangement— | ||
(a) confirmation that such other intermediary has provided the specified information to the Revenue Commissioners in a return made under this section, and | ||
(b) the reference number assigned to the arrangement by the Revenue Commissioners. | ||
(7) Subject to subsection (8), where an intermediary is required to provide the specified information on a reportable cross-border arrangement to the competent authority of more than one Member State, such information shall be provided only to the competent authority of the Member State referred to in whichever of the following paragraphs first applies: | ||
(a) the competent authority of the Member State where the intermediary is resident for tax purposes; | ||
(b) the competent authority of the Member State where the intermediary has a permanent establishment through which the services with respect to the arrangement are provided; | ||
(c) the competent authority of the Member State which the intermediary is incorporated in or governed by the laws of; | ||
(d) the competent authority of the Member State where the intermediary is registered with a professional association related to legal, taxation or consultancy services. | ||
(8) Where subsection (7) applies, an intermediary shall be exempt from making a return under this section if the intermediary has— | ||
(a) a copy of the specified information provided to the competent authority of another Member State, and | ||
(b) confirmation, in writing, provided to the intermediary by the competent authority of another Member State that a reference number has been assigned to the arrangement by that competent authority. | ||
(9) Nothing in this section shall be construed as requiring an intermediary to disclose to the Revenue Commissioners— | ||
(a) information that is not within the knowledge, possession or control of the intermediary, or | ||
(b) information with respect to which a claim to legal professional privilege could be maintained by the intermediary in legal proceedings. | ||
(10) Where subsection (9)(b) applies, the intermediary concerned shall, without delay, notify any other intermediary or, if there is no other intermediary, the relevant taxpayer, of the obligations imposed on such other intermediary or that relevant taxpayer, as the case may be, under this Chapter. | ||
Duties of relevant taxpayer | ||
817RD.(1) Where there is no intermediary, or the relevant taxpayer has been notified by an intermediary under section 817RC(10), the relevant taxpayer shall make a return to the Revenue Commissioners of the specified information within 30 days beginning— | ||
(a) on the day after the reportable cross-border arrangement is made available for implementation to the relevant taxpayer, | ||
(b) on the day after the reportable cross-border arrangement is ready for implementation by the relevant taxpayer, or | ||
(c) when the first step in the implementation of a reportable cross-border arrangement was taken in relation to the relevant taxpayer, | ||
whichever occurs first. | ||
(2) A return required under this section shall be made by electronic means and the relevant provisions of Chapter 6 of Part 38 shall apply. | ||
(3) Where a relevant taxpayer is required to make a return under this section and there is more than one relevant taxpayer involved in the same reportable cross-border arrangement, the return shall be made by the relevant taxpayer referred to in whichever of the following paragraphs first applies: | ||
(a) the relevant taxpayer that agreed the reportable cross-border arrangement with the intermediary; | ||
(b) the relevant taxpayer that manages the implementation of the arrangement. | ||
(4) Where a relevant taxpayer is required to make a return under this section (‘the first relevant taxpayer’) and there is more than one relevant taxpayer involved in the same reportable cross-border arrangement, the first relevant taxpayer shall provide, in writing, to each such other relevant taxpayer, the reference number assigned to the arrangement by the Revenue Commissioners within 5 working days of the later of— | ||
(a) the date on which the first relevant taxpayer is notified by the Revenue Commissioners of the reference number, or | ||
(b) the date on which such other relevant taxpayer becomes involved in the arrangement. | ||
(5) A relevant taxpayer shall be exempt from making a return to the Revenue Commissioners under this section if the relevant taxpayer has received, in writing, from any other relevant taxpayer involved in the same reportable cross-border arrangement— | ||
(a) confirmation that such other relevant taxpayer has provided the specified information to the Revenue Commissioners in a return made under this section, and | ||
(b) the reference number assigned to the arrangement by the Revenue Commissioners. | ||
(6) Subject to subsection (7), where a relevant taxpayer is required to provide the specified information on a reportable cross-border arrangement to the competent authority of more than one Member State, such information shall be provided only to the competent authority of the Member State referred to in whichever of the following paragraphs first applies: | ||
(a) the competent authority of the Member State where the relevant taxpayer is resident for tax purposes; | ||
(b) the competent authority of the Member State where the relevant taxpayer has a permanent establishment benefitting from the arrangement; | ||
(c) the competent authority of the Member State where the relevant taxpayer receives income or generates profits, although the relevant taxpayer is not resident for tax purposes and has no permanent establishment in any Member State; | ||
(d) the competent authority of the Member State where the relevant taxpayer carries on an activity, although the relevant taxpayer is not resident for tax purposes and has no permanent establishment in any Member State. | ||
(7) Where subsection (6) applies, a relevant taxpayer shall be exempt from making a return under this section if the relevant taxpayer has— | ||
(a) a copy of the specified information provided to the competent authority of another Member State, and | ||
(b) confirmation, in writing, provided to the relevant taxpayer by the competent authority of another Member State that a reference number has been assigned to the arrangement by that competent authority. | ||
(8) Any person who obtains or seeks to obtain a tax advantage from a reportable cross-border arrangement shall be a chargeable person for the purposes of Part 41A. | ||
(9) A relevant taxpayer shall include the reference number assigned to a reportable cross-border arrangement in the return, within the meaning of Part 41A, for any chargeable period, within the meaning of Part 41A, in which the relevant taxpayer— | ||
(a) entered into any transaction which is or forms part of a reportable cross-border arrangement, or | ||
(b) obtains, or seeks to obtain, a tax advantage from a reportable cross-border arrangement. | ||
(10) Nothing in this section shall be construed as requiring a relevant taxpayer to disclose to the Revenue Commissioners information that is not within the knowledge, possession or control of the relevant taxpayer. | ||
Duties of Revenue Commissioners | ||
817RE. (1) Where a return is made to the Revenue Commissioners under this Chapter, the Revenue Commissioners shall assign a reference number to the reportable cross-border arrangement if no such number has already been assigned to it by the Revenue Commissioners or by the competent authority of another Member State. | ||
(2) The fact that the Revenue Commissioners do not react to a reportable cross-border arrangement shall not imply any acceptance of the validity or tax treatment of the arrangement. | ||
(3) The Revenue Commissioners may authorise any of their officers to perform any acts and discharge any functions authorised by this Chapter. | ||
Arrangements implemented before 1 July 2020 | ||
817RF.(1) (a) Subject to paragraph (b), section 817RC shall apply to reportable cross-border arrangements the first step of which was implemented during the period beginning on 25 June 2018 and ending on 30 June 2020. | ||
(b) Where paragraph (a) applies, a return of the specified information shall be made to the Revenue Commissioners under section 817RC not later than 31 August 2020 and the time limit specified in section 817RC(1) or (2), as the case may be, shall not apply. | ||
(2) (a) Subject to paragraph (b), section 817RD shall apply to reportable cross-border arrangements the first step of which was implemented during the period beginning on 25 June 2018 and ending on 30 June 2020. | ||
(b) Where paragraph (a) applies, a return to the Revenue Commissioners of the specified information shall be made under section 817RD not later than 31 August 2020 and the time limit specified in section 817RD(1) shall not apply. | ||
Exchange of information | ||
817RG. The Revenue Commissioners, when communicating the information specified in Article 8ab(14) of the Directive to the competent authorities of all other Member States in accordance with the Regulations of 2012, may disclose the following information connected with or supplementary to the information so specified: | ||
(a) the reference number assigned to the reportable cross-border arrangement concerned; | ||
(b) in relation to each intermediary and relevant taxpayer concerned— | ||
(i) the country of issuance of the taxpayer identification number of each such intermediary and relevant taxpayer, | ||
(ii) whether each such intermediary or relevant taxpayer is an individual or entity, and | ||
(iii) the address of each such intermediary or relevant taxpayer. | ||
Penalties | ||
817RH.(1) A person who fails to comply with any of the obligations imposed on such person by this Chapter shall— | ||
(a) where the failure relates to the obligation imposed on a person under subsection (3) or (10) of section 817RC, or section 817RD(4) or 817RF, be liable to— | ||
(i) a penalty not exceeding €4,000, and | ||
(ii) if the failure continues after a penalty is imposed under subparagraph (i), to a further penalty of €100 per day for each day on which the failure continues after the day on which the penalty is imposed under that subparagraph, | ||
(b) where the failure relates to the obligation imposed on a person under subsection (1), (2) or (5) of section 817RC or section 817RD(1), be liable to— | ||
(i) a penalty not exceeding €500 for each day during the initial period, and | ||
(ii) if the failure continues after a penalty is imposed under subparagraph (i), to a further penalty of €500 per day for each day on which the failure continues after the day on which the penalty is imposed under that subparagraph, | ||
(c) where the failure relates to the obligation imposed on a person by section 817RD(9), be liable to a penalty not exceeding €5,000. | ||
(2) For the purposes of subsection (1)(b) — | ||
‘the initial period’ means the period— | ||
(a) beginning on the relevant day, and | ||
(b) ending on the day on which an application referred to in subsection (3) is made; | ||
‘relevant day’ means the first day after the end of the period specified in subsection (1), (2) or (5) of section 817RC or section 817RD(1), as the case may be, during which the obligation imposed on a person by the said subsection (1), (2) or (5) of section 817RC or section 817RD(1), as the case may be, shall be discharged. | ||
(3) (a) Notwithstanding section 1077B, the Revenue Commissioners shall, in relation to a failure referred to in subsection (1), make an application to the relevant court for that court to determine whether the person named in the application has failed to comply with the obligation imposed on that person by a provision referred to in subsection (1)(a), (b) or (c), as the case may be. | ||
(b) In paragraph (a) ‘relevant court’ means the District Court, the Circuit Court or the High Court, as appropriate, by reference to the jurisdictional limits for civil matters laid down in Courts of Justice Act 1924 and the Courts (Supplemental Provisions) Act 1961 . | ||
(4) A copy of an application under subsection (3) shall be given to the person to whom the application relates. | ||
(5) The relevant court shall determine whether the person named in the application made under subsection (3) is liable to the penalty provided for in paragraph (a), (b) or (c), as the case may be, of subsection (1) and the amount of that penalty, and in determining the amount of the penalty the court shall have regard to paragraph (a) or (b), as the case may be, of subsection (6). | ||
(6) In determining the amount of a penalty under subsection (5) the court shall have regard— | ||
(a) in the case of a person who is an intermediary, to the amount of any fees received, or likely to have been received, by the person in connection with the reportable cross-border arrangement, and | ||
(b) in any other case, to the amount of any tax advantage gained, or sought to be gained, by the person from the reportable cross-border arrangement. | ||
(7) Section 1077C shall apply for the purposes of a penalty under subsection (1).”. | ||
(2) Subsection (1) shall come into operation on 1 July 2020. | ||
15 OJ No. L64, 11.3.2011, p. 1 16 OJ No. L359, 16.12.2014, p. 1 17 OJ No. L332, 18.12.2015, p. 1 18 OJ No. L146, 3.6.2016, p. 8 |