Finance Act 2022
|
Penalty for deliberately or carelessly making incorrect returns or failing to make certain returns, etc. | ||
|
85. The Finance Act 2001 is amended by the insertion of the following section after section 99B: | ||
“99C. (1) In this section— | ||
‘carelessly’ means failure to take reasonable care; | ||
‘liability to tax’ means a liability to the amount of the difference specified in subsection (3) or (5), as the case may be, arising from any matter referred to in subsection (2) or (4), as the case may be; | ||
‘period’ means taxable period, accounting period or other period, as the context requires; | ||
‘prompted qualifying disclosure’, in relation to a person, means a qualifying disclosure that has been made to the Commissioners or to an officer in the period between— | ||
(a) the date on which a person is notified by an officer of the date on which an inquiry or investigation into any matter occasioning a liability to tax of that person will start, and | ||
(b) the date that the inquiry or investigation starts; | ||
‘qualifying disclosure’, in relation to a person, means— | ||
(a) in relation to a penalty referred to in subsection (6), a disclosure that the Commissioners are satisfied is a disclosure of— | ||
(i) complete information in relation to, and full particulars of, all matters occasioning a liability to tax that gives rise to a penalty referred to in subsection (6), and | ||
(ii) full particulars of all matters occasioning any liability to tax or duty that gives rise to— | ||
(I) a penalty referred to in section 1077F(6) of the Taxes Consolidation Act 1997 , | ||
(II) a penalty referred to in section 134A(2) of the Stamp Duties Consolidation Act 1999 , | ||
(III) a penalty referred to in section 116A(6) of the Value-Added Tax Consolidation Act 2010, and | ||
(IV) the application of section 1077F(6) of the Taxes Consolidation Act 1997 to the Capital Acquisitions Tax Consolidation Act 2003 , | ||
and | ||
(b) in relation to a penalty referred to in subsection (7) or (8), as the case may be, a disclosure that the Commissioners are satisfied is a disclosure of complete information in relation to, and full particulars of, all matters occasioning a liability to tax that gives rise to a penalty referred to in subsection (7) or (8), as the case may be, for the period to which the disclosure relates, | ||
made in writing to the Commissioners or to an officer and signed by or on behalf of that person and that is accompanied by— | ||
(A) a declaration, to the best of that person’s knowledge, information and belief, made in writing that all matters contained in the disclosure are correct and complete, and | ||
(B) a payment of the tax and duty payable in respect of any matter contained in the disclosure and the interest on late payment of that tax and duty; | ||
‘tax’ means any duty of excise; | ||
‘transaction’ means any action giving rise to a liability to, or relief from, tax; | ||
‘unprompted qualifying disclosure’, in relation to a person, means a qualifying disclosure that the Commissioners are satisfied has been voluntarily furnished to them— | ||
(a) before an inquiry or investigation had been started by them or by an officer into any matter occasioning a liability to tax of that person, or | ||
(b) where the person is notified by an officer of the date on which an inquiry or investigation into any matter occasioning a liability to tax of that person will start, before that notification. | ||
(2) Where a person— | ||
(a) furnishes a return or makes a claim or declaration for the purposes of any requirement of excise law and, in so doing, the person deliberately— | ||
(i) furnishes an incorrect return, or | ||
(ii) makes an incorrect claim or declaration, | ||
or | ||
(b) furnishes a return or makes a claim or declaration for the purposes of any requirement of excise law and, in so doing, the person carelessly but not deliberately— | ||
(i) furnishes an incorrect return, or | ||
(ii) makes an incorrect claim or declaration, | ||
then— | ||
(I) in the case of paragraph (a), that action shall be a deliberate default for the purposes of this section, and | ||
(II) in the case of paragraph (b), that action shall be a careless default for the purposes of this section, | ||
and the person shall be liable to a penalty. | ||
(3) The penalty referred to in subsection (2) shall be the difference between— | ||
(a) the amount of tax (if any) paid or claimed by the person concerned for the relevant period or transaction on the basis of the incorrect return, claim or declaration referred to in subsection (2) as furnished or otherwise made, and | ||
(b) the amount properly payable by, or refundable to, that person for that period or transaction. | ||
(4) Where a person— | ||
(a) deliberately fails to comply, or | ||
(b) carelessly (but not deliberately) fails to comply, | ||
with a requirement in accordance with any provision of excise law to furnish a return or make a declaration, that failure to comply with a requirement shall— | ||
(i) in the case of paragraph (a), be a deliberate default for the purposes of this section, and | ||
(ii) in the case of paragraph (b), be a careless default for the purposes of this section, | ||
and the person shall be liable to a penalty. | ||
(5) In relation to any matter that would have been included in a return or declaration referred to in subsection (4) if the return or declaration had been delivered by a person and had been correct, the penalty referred to in subsection (4) shall be the difference between— | ||
(a) the amount of tax (if any) paid by the person for the relevant period or transaction before— | ||
(i) unless subparagraph (ii) applies, the date of the notice in writing from the Commissioners to the person concerned of an inquiry or investigation by the Commissioners or an officer into the matter, or | ||
(ii) where the Commissioners had announced publicly that they had started an inquiry or investigation into the matter, the date of that public announcement, | ||
and | ||
(b) the amount of tax properly payable by the person for that period or transaction. | ||
(6) (a) (i) Subject to subparagraphs (ii), (iii) and (iv), where a person is liable to a penalty under subsection (2) or (4), as the case may be, for a deliberate default, the penalty referred to in subsection (3) or (5), as the case may be, shall not be reduced. | ||
(ii) Where subparagraph (i) applies and the person cooperated fully with any inquiry or investigation started by the Commissioners or by an officer into any matter occasioning a liability to tax of that person, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 75 per cent of the difference referred to in subsection (3) or (5), as the case may be (referred to in this subsection and subsections (7) and (8) as ‘the difference’). | ||
(iii) Where subparagraph (ii) applies and the person made a prompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 50 per cent of the difference. | ||
(iv) Where subparagraph (ii) applies and the person made an unprompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 10 per cent of the difference. | ||
(b) (i) Subject to subparagraph (ii), where a second qualifying disclosure is made by a person within 5 years of such person’s first qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, for a deliberate default shall not be reduced. | ||
(ii) Where subparagraph (i) applies and the person cooperated fully with any inquiry or investigation started by the Commissioners or by an officer into any matter occasioning a liability to tax of that person, then— | ||
(I) where that person made a prompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 75 per cent of the difference, and | ||
(II) where the person made an unprompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 55 per cent of the difference. | ||
(c) Where a third or subsequent qualifying disclosure is made by a person within 5 years of such person’s second qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, for a deliberate default under subsection (2) or (4), as the case may be, shall not be reduced. | ||
(7) (a) In this subsection and subsection (8), ‘significant consequences’ means, where subsection (2) applies, the amount of the difference referred to in subsection (3) exceeds 15 per cent of the amount referred to in paragraph (b) of subsection (3) and, where subsection (4) applies, the amount of the difference referred to in subsection (5) exceeds 15 per cent of the amount referred to in paragraph (b) of subsection (5). | ||
(b) (i) Subject to subparagraphs (ii), (iii) and (iv), where a person is liable to a penalty under subsection (2) or (4), as the case may be, for a careless default which has significant consequences, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 40 per cent of the difference. | ||
(ii) Where subparagraph (i) applies and the person cooperated fully with any inquiry or investigation started by the Commissioners or by an officer into any matter occasioning a liability to tax of that person, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 30 per cent of the difference. | ||
(iii) Where subparagraph (ii) applies and the person also made a prompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 20 per cent of the difference. | ||
(iv) Where subparagraph (ii) applies and the person also made an unprompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 5 per cent of the difference. | ||
(c) (i) Subject to subparagraph (ii), where a second qualifying disclosure is made by a person within 5 years of such person’s first qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, for a careless default with significant consequences shall be reduced to 40 per cent of the difference. | ||
(ii) Where subparagraph (i) applies and the person cooperated fully with any inquiry or investigation started by the Commissioners or by an officer into any matter occasioning a liability to tax of that person, then— | ||
(I) where the person made a prompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 30 per cent of the difference, and | ||
(II) where the person made an unprompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 20 per cent of the difference. | ||
(d) Where a third or subsequent qualifying disclosure is made by a person within 5 years of such person’s second qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, for a careless default with significant consequences shall be reduced to 40 per cent of the difference. | ||
(8) (a) Subject to paragraphs (b), (c) and (d), where a person is liable to a penalty under subsection (2) or (4), as the case may be, for a careless default which does not have significant consequences, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 20 per cent of the difference. | ||
(b) Where paragraph (a) applies and the person cooperated fully with any inquiry or investigation started by the Commissioners or by an officer into any matter occasioning a liability to tax of that person, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 15 per cent of the difference. | ||
(c) Where paragraph (b) applies and the person also made a prompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 10 per cent of the difference. | ||
(d) Where paragraph (b) applies and the person also made an unprompted qualifying disclosure, the penalty referred to in subsection (3) or (5), as the case may be, shall be reduced to 3 per cent of the difference. | ||
(9) Where— | ||
(a) the aggregate amount of— | ||
(i) the liability to tax (within the meaning of subsection (1)), | ||
(ii) the liability to tax (within the meaning of section 1077F(1) of the Taxes Consolidation Act 1997 ), | ||
(iii) the liability to tax (within the meaning of section 116A(1) of the Value-Added Tax Consolidation Act 2010 ), | ||
(iv) the liability to duty (within the meaning of section 134A(15) of the Stamp Duties Consolidation Act 1999 ), and | ||
(v) the differences specified in subsections (5) and (5A), as appropriate, of section 58 of the Capital Acquisitions Tax Consolidation Act 2003 , | ||
does not exceed €6,000, and | ||
(b) but for this subsection the penalty would be reduced in accordance with subsection (7) or (8) of this section, subsection (7) or (8) of section 1077F of the Taxes Consolidation Act 1997 , subsection (7) or (8) of section 116A of the Value-Added Tax Consolidation Act 2010 or subsection (5)(b) or (5A)(b) of section 134A of the Stamp Duties Consolidation Act 1999 , as the case may be, | ||
then, notwithstanding subsection (2) or (4), as the case may be, that person shall not be liable to a penalty. | ||
(10) Where any person is liable to a penalty under subsection (2) so much of the difference specified in subsection (3) as is attributable to a technical adjustment or an innocent error shall not be liable to a penalty. | ||
(11) Where, for the purposes of any requirement under excise law, a person deliberately or carelessly produces, furnishes, gives, sends or otherwise makes use of, any incorrect invoice, registration number, credit note, debit note, receipt, account, voucher, bank statement, estimate, statement, information, book, document or record, the person shall be liable to— | ||
(a) a penalty of €3,000 where that person has acted carelessly, or | ||
(b) a penalty of €5,000 where that person has acted deliberately. | ||
(12) Where any return, claim or declaration referred to in subsection (2) was furnished or made by a person, neither deliberately nor carelessly, and it comes to the person’s notice that it was incorrect, then, unless the error is remedied without unreasonable delay, the incorrect return, claim or declaration shall be treated for the purposes of this section as having been deliberately made or submitted by that person. | ||
(13) Subject to section 1077D(2) of the Taxes Consolidation Act 1997 , proceedings or applications for the recovery of any penalty under this section shall not be out of time because they are commenced after the time allowed by section 99AB. | ||
(14) A disclosure in relation to a person shall not be a qualifying disclosure where— | ||
(a) before the disclosure is made, an officer had started an inquiry or investigation into any matter contained in that disclosure and had contacted or notified that person, or a person representing that person, in this regard, or | ||
(b) matters contained in the disclosure are matters— | ||
(i) that have become known, or are about to become known, to the Commissioners through their own investigations or through an investigation conducted by a statutory body or agency, | ||
(ii) that are within the scope of an inquiry being carried out wholly or partly in public, or | ||
(iii) to which the person who made the disclosure is linked, or about to be linked, publicly. | ||
(15) For the purposes of this section, any return, claim or declaration referred to in subsection (2) submitted on behalf of a person shall be deemed to have been submitted by that person unless that person proves that it was submitted without that person’s consent or knowledge. | ||
(16) Where a person referred to in subsection (2) or (4), as the case may be, is a body of persons, then the person acting in the capacity of secretary to such body shall be liable to a separate penalty of €1,500 or, in the case of deliberate behaviour, €3,000.”. |