WILL IRELAND ADOPT A LIECHTENSTEIN DISCLOSURE FACILITY TYPE POLICY?
Ireland is facing a situation where, for all intents and purposes, the banks have been nationalized. The country is facing a severe economic crisis and the government is desperately looking for ways to increase revenues.
There’s a feeling in the Irish Revenue, that many Irish citizens and tax payers have significant assets hidden away in jurisdictions that the Irish government cannot trace.
The way that the Revenue has approached this situation is quite clever. Not only have they been able to open access to Irish offshore jurisdictions such as Jersey, Isle of Mann and Guernsey, but they’ve also been able to trace, through their own banking system, transfers to and from these jurisdictions.
The problem they’re facing is actually recovering the ‘debts’. The reason is that the Irish citizens or tax payers who’ve been using these offshore locations, have not left their assets there where they’re open to seizure. Instead they have dissipated their money through means such as moving to other offshore jurisdictions where Ireland has no access.
Essentially, the Irish government is now faced with bankruptcy or liquidation… and they have nowhere to go.
This being the case, will Ireland consider a similar deal to that set up by the U.K. with the recent Liechtenstein Disclosure Facility or the Swiss Bank Facility?
Politically it would be dynamite. Having already given the Irish people many opportunities whereby they can bring their tax affairs into compliance, it would be naive to assume that every Irish citizen or tax payer has actually taken advantage of the offer and done so.
It seems as if the Irish Revenue is facing an impasse.
Bob Evans, U.K. tax investigation and Liechtenstein Disclosure Facility expert suggests that it would be prudent for the Irish government to enter a dialogue with the U.K. government for the purpose of discussing the level of success of the U.K.’s Liechtenstein Disclosure Facility / Swiss Bank Facility initiatives with a view to following their example.
These sort of initiatives could assist Ireland in recovering at least some of the offshore funds which are at present beyond their reach. With the situation as desperate for Ireland as it is, it seems that this avenue is one they cannot afford to ignore, regardless of the possible political fall out such actions might incur.
As a result of the punitive tax rates of the ’80’s and ’90’s, and the even more punitive ‘penalty interest’ policy, many Irish citizens took flight with their assets to less expensive jurisdictions.
If Irish citizens, who’ve left Ireland because of their tax situation, see some hope in remedying their tax indebtedness without it costing them everything, they may decide to return from their self-imposed exile and once again take their place as productive, law abiding tax payers contributing to the wealth of their homeland.
This alone would help bolster Ireland’s failing economy and reinvigorate its tax base.
Despite the various tax amnesty’s Ireland has offered over the past few years, the penalties were still so great as to make a voluntary disclosure highly unattractive.
A compromise such as the Liechtenstein Disclosure Facility or the Swiss Bank deal could be just what is required to turn the tide.
If you’d like to find out more about how tax investigations work, or you’d like to speak with a tax investigation specialist, then visit the site UK Tax Investigation site where you can request confidential information including a secure phone number on which to get advice.
If you believe you’re at risk of tax investigation, especially for undeclared offshore assets, Evans has considerable experience in this area and is currently assisting clients to take advantage of a little known legal, UK approved tax ‘loophole’ known as the Liechtenstein Disclosure Facility or LDF. He advises anyone interested to take advantage of the education offered by the free articles and videos on UK Tax Investigation site.