Revenue Note for Guidance

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Revenue Note for Guidance

Section 126AA Further levy on certain financial institutions

Summary

This section provides for an annual levy on certain financial institutions in the years 2014, 2015 and 2016, which is payable on 20 October in each of these years. This is sometimes referred to as the bank levy.

Details

(1) Definitions are provided for certain terms used in this section. Most of these definitions are self-explanatory:

“appropriate tax” means the amount of DIRT deducted from interest paid on deposit accounts under section 256 of the Taxes Consolidation Act 1997.

“assessable amount” is the base on which the levy will be calculated (i.e. the DIRT attributable to the financial institution for 2011).

“relevant business” means the business of taking and holding deposits (within the meaning of section 256 of the Taxes Consolidation Act 1997) in respect of which DIRT was paid under sections 258 or 259 of the Taxes Consolidation Act 1997.

“due date” is the date on which the levy is payable (i.e. 20 October in 2014, 2015 and 2016).

“relevant person” means a financial institution which—

  • in the year 2011 was the holder of a banking licence or was a building society, and
  • was obliged to pay DIRT in 2011, and
  • is carrying on a trade or business in the State – whether including a business of taking and holding deposits or not.

A financial institution, whose payment of DIRT did not exceed €100,000 in 2011, is excluded from payment of the levy.

“relevant retention tax” means the amount of DIRT attributable to the year 2011 whether paid in 2011 or after 2011. DIRT amounts paid in 2011 that are attributable to an earlier year are excluded.

Details of the DIRT attributable to 2011 are :

  1. By the 15th January 201, the balance of the financial institutions D.I.R.T. paid (or that should have been paid) for the 2010 tax year
  2. By the 20th April 2011, initial D.I.R.T. paid (or that should have been paid) for 2011 [covering the period 1st January to 31st March 2011].
  3. By the 20th July 2011, 2nd D.I.R.T. paid (or that should have been paid) for 2011 [covering the period 1st April 2011 to 30th June 2011].
  4. By the 20th October 2011, 3rd D.I.R.T. paid (or that should have been paid) for 2011 [covering the period 1st July to 30th September 2011].

“year 2011” means the period of 12 months ending on 31 December 2011.

(2)A financial institution is required to deliver to the Revenue Commissioners, by the due date in each of the years 2014, 2015 and 2016, a statement showing the assessable amount for that institution.

(3)Where, between 1 January 2011 and a due date, a financial institution ceases to carry on a relevant business (i.e. a business of taking and holding deposits) and another person acquires the whole or substantially the whole of the relevant business, the financial institution will not be obliged to deliver the statement to the Revenue Commissioners on the due date. Instead, the statement is required to be delivered by the successor. If the successor is already obliged to deliver a statement, it must include the details in its return. Otherwise, it is obliged to deliver a statement in lieu of the financial institution.

(4) & (5) Where a further succession takes place before a due date, the person who succeeds to the relevant business assumes the responsibility for delivery of the statement to the Revenue Commissioners in place of the person from whom the relevant business was acquired. Similar rules apply for a subsequent succession and for any further successions to a relevant business.

(6)A stamp duty of an amount equal to 35 per cent of the assessable amount is chargeable on the statement which is required to be delivered to the Revenue Commissioners.

(7) The stamp duty is payable by the financial institution on delivery of the statement to the Revenue Commissioners.

(8)The financial institution is obliged to furnish any information required by the Revenue Commissioners in relation to the statement.

(9)The failure to deliver a statement and to pay the stamp duty by the due date will result in an interest charge (see section 159D) and a penalty of €380 for each day the stamp duty remains unpaid.

(10)Enforcement measures in relation to the delivery of the statement are provided for.

(11)A financial institution may not claim the stamp duty, or any interest or penalty chargeable under the section, as a deduction in the computation of any tax or duty payable by that financial institution.

Relevant Date: Finance Act 2014