Finance Act, 1988

Deduction from payments due to defaulters of amounts due in relation to tax.

73.—(1) (a) This section shall apply and have effect as on and from the 1st day of October, 1988.

(b) In this section, except where the context otherwise requires—

“the Acts” means—

(i) the Tax Acts,

(ii) the Capital Gains Tax Acts, and

(iii) the Value-Added Tax Act, 1972 , and the enactments amending or extending that Act,

and any instruments made thereunder;

“additional debt” means, in relation to a relevant person who has received a notice of attachment in respect of a taxpayer, any amount which, at any time after the time of the receipt by the relevant person of the notice of attachment but before the end of the relevant period in relation to the notice, would be a debt due by him to the taxpayer if a notice of attachment were received by him at that time;

“debt” means, in relation to a notice of attachment given to a relevant person in respect of a taxpayer and in relation to the said relevant person and taxpayer, the amount or aggregate amount of any money which, at the time the notice of attachment is received by the relevant person, is due by the relevant person (whether on his own account, or as an agent or trustee) to the taxpayer, irrespective of whether the taxpayer has applied for the payment (to himself or any other person) or for the withdrawal of all or part of the money:

Provided that—

(i) where a relevant person is a financial institution, any amount or aggregate amount of money, including interest thereon, which at that time is a deposit held by the relevant person to the credit of the taxpayer for his sole benefit, shall be regarded as a debt due by the relevant person to the taxpayer at that time,

(ii) any amount of money due by the relevant person to the taxpayer as emoluments under a contract of service shall not be so regarded, and

(iii) where there is a dispute as to an amount of money which is due by the relevant person to the taxpayer, the amount in dispute shall be disregarded for the purposes of determining the amount of the debt;

“deposit” means a sum of money paid to a financial institution on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made;

“emoluments” means anything assessable to income tax under Schedule E;

“financial institution” means a holder of a licence issued under section 9 of the Central Bank Act, 1971 , or a person referred to in section 7 (4) of that Act and includes a branch of a financial institution that records deposits in its books as liabilities of the branch;

“further return” means a return made by a relevant person under subsection (4);

“interest on unpaid tax” means, in relation to a specified amount specified in a notice of attachment, interest, that has accrued to the date on which the notice of attachment is given, under any provision of the Acts providing for the charging of interest in respect of unpaid tax including interest on an undercharge of tax which is attributable to fraud or neglect;

“notice of attachment” means a notice under subsection (2);

“notice of revocation” means a notice under subsection (10);

“penalty” means a monetary penalty imposed on a taxpayer under a provision of the Acts;

“relevant period”, in relation to a notice of attachment, means, as respects the relevant person to whom the notice of attachment is given, the period commencing at the time at which the notice is received by the relevant person and ending on—

(i) the date on which he completes the payment to the Revenue Commissioners out of the debt, or the aggregate of the debt and any additional debt, due by him to the taxpayer named in the notice, of an amount equal to the specified amount in relation to the taxpayer,

(ii) the date on which he receives a notice of revocation of the notice of attachment, or

(iii) where he or the taxpayer named in the notice is—

(I) declared bankrupt, the date he or the taxpayer is so declared, or

(II) a company which commences to be wound up, the “relevant date” within the meaning of section 285 of the Companies Act, 1963 , in relation to the winding up,

whichever is the earliest;

“relevant person” means, in relation to a taxpayer, a person in respect of whom the Revenue Commissioners have reason to believe that he may have, at the time a notice of attachment is received by him in respect of a taxpayer, a debt due to the taxpayer;

“return” means a return made by a relevant person under subsection (2) (a) (iii);

“specified amount” has the meaning assigned to it by subsection (2) (a) (ii);

“tax” means any tax, duty, levy or charge which, in accordance with any provision of the Acts, is placed under the care and management of the Revenue Commissioners;

“taxpayer” means a person who is liable to pay, remit or account for tax to the Revenue Commissioners under the Acts.

(2) (a) Subject to subsection (3), where a taxpayer has made default, whether before or after the passing of this Act, in paying, remitting, or accounting for, any tax, interest on unpaid tax, or penalty to the Revenue Commissioners, the Revenue Commissioners may, if the taxpayer has not made good the default, give to a relevant person in relation to the taxpayer a notice in writing (in this section referred to as “the notice of attachment”) in which is entered—

(i) the taxpayer's name and address,

(ii) the amount or aggregate amount (in this section referred to as “the specified amount”) of the taxes, interest on unpaid taxes and penalties in respect of which the taxpayer is in default at the time of the giving of the notice of attachment, and

(iii) a direction to the relevant person—

(I) to deliver to the Revenue Commissioners, within the period of 10 days from the time at which the notice of attachment is received by him, a return in writing specifying whether or not any debt is due by him to the taxpayer at the time the notice is received by him, and if any debt is so due, specifying the amount of the debt:

Provided that where the amount of the debt due by the relevant person to the taxpayer is equal to or greater than the specified amount in relation to the taxpayer, the amount of the debt specified in the return shall be an amount equal to the specified amount,

and

(II) if the amount of any debt is so specified to pay to the Revenue Commissioners within the period aforesaid a sum equal to the amount of the debt so specified.

(b) A relevant person to whom a notice of attachment has been given shall comply with the direction in the notice.

(3) An amount in respect of tax, interest on unpaid tax or a penalty, as respects which a taxpayer is in default as specified in subsection (2), shall not be entered in a notice of attachment unless—

(a) a period of one month has expired from the date on which such default commenced, and

(b) the Revenue Commissioners have given the taxpayer a notice in writing (whether or not the document containing the notice also contains other information being communicated by the Revenue Commissioners to the taxpayer), not later than 10 days before the date of the receipt by the relevant person concerned of the notice of attachment, stating that, if the amount is not paid, it may be specified in a notice of attachment and recovered under this section from a relevant person in relation to the taxpayer.

(4) If, when a relevant person receives a notice of attachment, the amount of the debt due by him to the taxpayer named in the notice is less than the specified amount in relation to the taxpayer or no debt is so due and, at any time thereafter before the end of the relevant period in relation to the notice, an additional debt becomes due by the relevant person to the taxpayer, the relevant person shall, within 10 days of that time—

(a) if the aggregate of the amount of any debt so due and the additional debt so due is equal to or less than the specified amount in relation to the taxpayer—

(i) deliver a further return to the Revenue Commissioners specifying the additional debt, and

(ii) pay to the Revenue Commissioners the amount of the additional debt,

and so on for each subsequent occasion during the relevant period in relation to the notice of attachment on which an additional debt becomes due by the relevant person to the taxpayer until the aggregate amount of the debt and the additional debt or debts so due equals the specified amount in relation to the taxpayer or the provisions of paragraph (b) apply in relation to an additional debt, and

(b) if the aggregate amount of any debt and the additional debt or debts so due to the taxpayer is greater than the specified amount in relation to the taxpayer—

(i) deliver a further return to the Revenue Commissioners specifying such portion of the latest additional debt as when added to the aggregate of the debt and any earlier additional debts is equal to the specified amount in relation to the taxpayer, and

(ii) pay to the Revenue Commissioners the said portion of the additional debt.

(5) Where a relevant person delivers, either fraudulently or negligently, an incorrect return or further return that purports to be a return or further return made in accordance with this section, he shall be deemed to be guilty of an offence under section 94 of the Finance Act, 1983 .

(6) (a) Where a notice of attachment has been given to a relevant person in respect of a taxpayer, the relevant person shall not, during the relevant period in relation to the notice, make any disbursements out of the debt, or any additional debt, due by him to the taxpayer save to the extent that any such disbursement—

(i) will not reduce the debt or the aggregate of the debt and any additional debts so due to an amount that is less than the specified amount in relation to the taxpayer, or

(ii) is made pursuant to an order of a court.

(b) For the purposes of this section, a disbursement made by a relevant person contrary to paragraph (a) shall be deemed not to reduce the amount of the debt or any additional debts due by him to the taxpayer.

(7) (a) Sections 500 and 503 of the Income Tax Act, 1967 , shall apply to a failure by a relevant person to deliver a return required by a notice of attachment within the time specified in the notice or to deliver a further return within the time specified in subsection (4) as they apply to a failure to deliver a return referred to in the said section 500 and Schedule 15 to the said Act is hereby amended by the insertion in Column 1 of “Finance Act, 1988, paragraph (a) (iii) (I) of subsection (2) and paragraphs (a) (i) and (b) (i) of subsection (4) of section 73.

(b) A certificate signed by an officer of the Revenue Commissioners which certifies that he has examined the relevant records and that it appears from them that, during a specified period, a specified return was not received from a relevant person shall be evidence until the contrary is proved that the relevant person did not deliver the return during that period and a certificate certifying as provided by this paragraph and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been so signed.

(8) Where a relevant person to whom a notice of attachment in respect of a taxpayer has been given—

(a) delivers the return required to be delivered by the said notice but fails to pay to the Revenue Commissioners, within the time specified in the notice, the amount specified in the return or any part of that amount, or

(b) delivers a further return under subsection (4) but fails to pay to the Revenue Commissioners, within the time specified in the said subsection (4), the amount specified in the further return or any part of that amount,

the amount specified in the return or further return, or the part of that amount, as the case may be, which he has failed to pay to the Revenue Commissioners may, if the notice of attachment has not been revoked by a notice of revocation, be sued for and recovered by action, or other appropriate proceedings, at the suit of an officer of the Revenue Commissioners in any court of competent jurisdiction.

(9) Nothing in this section shall be construed as rendering any failure by a relevant person to make a return or further return required by this section, or pay to the Revenue Commissioners the amount or amounts required by this section to be paid by him, liable to be treated as a failure to which section 94 of the Finance Act, 1983 , applies.

(10) (a) A notice of attachment given to a relevant person in respect of a taxpayer may be revoked by the Revenue Commissioners, at any time, by notice in writing given to the relevant person and shall be revoked forthwith if the taxpayer has paid the specified amount to the Revenue Commissioners.

(b) Where, in pursuance of this section, a relevant person pays any amount to the Revenue Commissioners out of a debt or an additional debt due by him to the taxpayer and, at the time of the receipt by the Revenue Commissioners of the said amount, the taxpayer has paid the specified amount to the Revenue Commissioners, the first-mentioned amount shall be refunded by the Revenue Commissioners forthwith to the taxpayer.

(11) If a notice of attachment or a notice of revocation is given to a relevant person in relation to a taxpayer a copy thereof shall be given by the Revenue Commissioners to the taxpayer forthwith.

(12) (a) If, in pursuance of this section, any amount is paid to the Revenue Commissioners by a relevant person, the relevant person shall forthwith give the taxpayer concerned a notice in writing specifying the payment, its amount and the reason for which it was made.

(b) On the receipt by the Revenue Commissioners of an amount paid in pursuance of this section, the Revenue Commissioners shall forthwith notify the taxpayer and the relevant person in writing of such receipt.

(13) If, in pursuance of this section, a relevant person pays to the Revenue Commissioners the whole or part of the amount of a debt, or an additional debt, due by him to a taxpayer, or any portion of such an amount, the taxpayer shall allow such payment and the relevant person shall be acquitted and discharged of the amount of the payment as if it had been paid to the taxpayer.

(14) If, in pursuance of this section, a relevant person is prohibited from making any disbursement out of a debt, or an additional debt, due to a taxpayer, no action shall lie against the relevant person in any court by reason of a failure to make any such disbursement.

(15) Any obligation on the Revenue Commissioners to maintain secrecy or any other restriction upon the disclosure of information by the Revenue Commissioners shall not apply in relation to information contained in a notice of attachment.

(16) A notice of attachment in respect of a taxpayer shall not be given to a relevant person at a time when the relevant person or the taxpayer is an undischarged bankrupt or a company being wound up.

(17) Where the Revenue Commissioners have given a notice of attachment to a relevant person in respect of a taxpayer, they shall not, during the relevant period in relation to the notice, give a notice of attachment in respect of the taxpayer to any other relevant person.

(18) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by the Revenue Commissioners.