Revenue Note for Guidance

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Revenue Note for Guidance

1065 Mitigation and application of fines and penalties

Summary

The Revenue Commissioners have the power to mitigate certain penalties and to stay or compound proceedings for the recovery of any fine or penalty imposed under the Acts, subject to certain conditions.

Details

(1) The Revenue Commissioners have, for the purposes of the Acts, the power to-

  1. mitigate any penalty or
  2. to stay, compound or settle by agreement any proceedings for the recovery of a fine or penalty imposed under the Acts.

In addition, they may further mitigate any penalty after judgment has been obtained.

(2)(a) No penalty may be mitigated or further mitigated by more than 50 per cent of the penalty.

(2)(b) No mitigation is allowed of penalties or fines applicable under the Waiver of Certain Tax, Interest and Penalties Act, 1993, (the amnesty legislation) where an individual —

  • fails to give a declaration required by section 2(3)(a) of that Act, or
  • gives such a declaration, or a declaration under section 3(6)(b) of that Act, which is false or does not comply with the specific requirements of that legislation in relation to that individual.

(3) Moneys arising from fines, penalties and forfeitures and any costs, charges and expenses relating to them must be accounted for and paid to the Revenue Commissioners or as they direct.

(4) For the purposes of the section, “the Acts” has the same meaning as in section 1077A(1), i.e. the legislation governing all taxes and duties administered by the Revenue Commissioners.

Following the amendments introduced in Finance (No 2) Act 2013, section 1065 is now the main provision governing mitigation of all penalties that may be imposed under the Acts.

Accordingly, the following provisions are repealed – being no longer necessary and effectively incorporated into section 1065:

  1. section 35 of the Inland Revenue Regulation Act 1890;
  2. section 209 of the Customs Consolidation Act 1876;
  3. section 118 of the Value-Added Tax Consolidation Act 2010.

In addition, the following provisions are amended:

  • Section 58 of the Capital Acquisitions Tax Consolidation Act 2003 and section 133(9)(a) of the Stamp Duties Consolidation Act 1999 are amended to delete the reference to section 1065, as it is unnecessary having regard to the fact that section 1065 now applies to all of the Acts.
  • Similarly, the Finance Act 2001 amends section 130 of the Finance Act 2001 (relating to Excise Duties) to retain a judge’s power of mitigation of fines and penalties, while deleting the Revenue Commissioners mitigation powers – which are now to be contained in section 1065.

Relevant Date: Finance Act 2019