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Mandatory reporting of certain tax schemes, February 2010 Section 141 of Finance Bill 2010 (the “Bill”), which has been proposed entirely as a Committee Stage amendment to the Bill, provides for a mandatory reporting requirement for promoters (including those engaged in tax advisory and banking services) or taxpayers in respect of certain ‘tax avoidance’ schemes. Any failure to meet their obligations will result in a promoter or taxpayer facing sizeable penalties. The proposed provisions mirror those introduced in the UK in 2004 and 2006 and will require a promoter, or where the promoter is based outside the State, the taxpayer, to provide specified information in respect of a disclosable transaction. A disclosable transaction for these purposes is a transaction or proposal for any transaction which falls within any specified description; or enables or may enable any person to obtain a tax advantage; or is such that the main benefit or one of the main benefits expected to arise from it is the obtaining of that tax advantage. Regulations are to be made by the Revenue Commissioners, with the consent of the Minister for Finance, specifying the class or classes of transactions that must be disclosed. Section 141 of the Bill states that a transaction specified in the regulations should fall within at least one of the following categories: a transaction which, but for these new provisions, a promoter or person would wish to keep confidential from the Revenue Commissioners or other class of person specified in the regulations; a transaction in respect of which the promoter obtains or charges a premium fee; a transaction which involves standardised documentation, largely determined by the promoter; a transaction, or any element of such transaction, which gives rise to a tax advantage of a class specified in the regulations. The above mentioned regulations will also specify such matters as the information to be disclosed and the time limits for the provision of such information. It is clear from section 141 of the Bill that the new reporting requirements will not extend to legally privileged information. Section 811A of the Taxes Consolidation Act 1997 (“TCA”) already requires a taxpayer to lodge a protective notification with the Revenue Commissioners in respect of certain transactions in order to protect the taxpayer from a punitive surcharge and interest in the event of the Revenue Commissioners successfully challenging the transaction as being a tax avoidance transaction for the purposes of the general anti-avoidance provision of section 811 TCA. The new provisions in the Bill specifically state that any disclosure of information required by the new provisions will not be regarded as a protective notification for the purposes of section 811A TCA. Therefore, more than one notification may be required to be given to the Revenue Commissioners in respect of the same transaction. This appears to be overly cumbersome. request publication        Relevant Partners Michael Ryan Eleanor MacDonagh