This year's Finance Bill provides for additional revenue powers across key areas of self-assessment.

Film Relief

Section 23. Officers of a company qualifying for film relief may be penalised for failing to meet scheme reporting requirements. In addition, Revenue may refuse permission to make refunds of investments to investors where the reporting requirements have not been met.

Credit Card and Laser Card Transactions

Section 107 provides for significant additional reporting requirements on credit and charge card providers. In future, they will be obliged to provide reports to Revenue of the traders they deal with and amounts they settle. While it probably would have been within Revenue's entitlements to get this information by way of High Court order on a case-by-case basis, section 107 makes the reporting requirement automatic. We understand that this new provision is targeted towards combating the Shadow Economy in particular.

Returns of Property

Anyone who has had to make a Statement of Affairs to the Collector General may be surprised to find that up to now there was only a limited statutory obligation to do so. Failure to do so on request will now be a revenue offence. (Section 110)

Bonds for Fiduciary Taxes

If a taxpayer has been involved in the management of the business where tax has not been paid in full, or if taxes are more than 30 days in arrears, the Collector General may now require the taxpayer to provide security for taxes which may become due. (Section 111). It is not immediately clear how this section will operate in practice, and it may need to be supplemented by a Statement of Practice.

Legal Professional Privilege

A new provision within the Taxes Consolidation Act, section 908F, will give a Revenue officer an avenue to challenge claims that requested materials are subject to legal professional privilege and cannot be furnished on those grounds. The Revenue officer may apply to the District Court for a determination on the status of such documents, and has a right of appeal to the Circuit Court, but apparently no further.

Modernisation of Direct Taxes Assessing Rules

A significant number of new sections replace Parts 39 and 41 of the Taxes Consolidation Act 1997. Per Revenue notes on the matter “In order to bring consistency across the direct taxes and consistency between self-assessment and non-self-assessment rules, it is considered that one common set of rules should apply. Having one common set of rules will lead to the simplification of the assessment process for both taxpayers and Revenue and will minimise points of doubt and ambiguity. In relation to self-assessment, it is proposed that taxpayers should be required to fully self-assess for IT / CT / CGT purposes. Such a system already applies for the purposes of CAT (Capital Acquisitions Tax) and proposals are being made this year to also move to full self-assessment for stamp duties.”

By and large, these measures do serve to simplify the current assessing rules. In future, the key “assessing document” will be the ROS computation, although without prejudice to Revenue's entitlements to raise assessments in cases of fraud or neglect. We understand that there may be some further changes introduced as the Bill goes through the Oireachtas.

Mandatory filing of accounts using iXBRL

An innocuous looking technical amendment at section 116 will allow Revenue to make mandatory efiling of accounts using a technology known as iXBRL. This technology will facilitate the automatic analysis by Revenue computer systems of the accounts and ultimately the computations submitted. iXBRL is an innovative and progressive technology which is rapidly becoming an international standard for the exchange of financial information by electronic means.

While we have no concern in relation to its use, and indeed welcome efforts by the Revenue Commissioners to become iXBRL compatible, we are also conscious of compliance costs for businesses and for the accountancy practices which act for them. A comparable project in the United Kingdom to make the use of iXBRL mandatory has resulted in significant additional filing costs and delays in submitting returns.

A consultation process, sponsored by Revenue, on the phasing in of iXBRL is already underway. This Institute will participate in the consultation with a view to ensuring that progressive technologies can be used by tax practices without resulting in unnecessary and unwelcome additional costs, and that there is business benefit to be had from any new technology investment.

Obligation to Keep Records

Section 77 and 104 amend section 886 TCA 1997 to ensure that the current six-year requirement to keep records and underlying documentation will also apply to companies in liquidation and to companies which have been dissolved.

Confirmation of Measures Announced in the Budget

Key measures flagged under Budget 2012 have been given effect by Finance Bill 2012 which are analysed below.