Ireland signs information exchange deal with OECD countries to tackle tax evasion
Revenue will get details of property that people own abroad, and any money they are making from it, under new agreements signed by 25 OECD states, including Ireland, on Thursday designed to curb tax evasion.The accord fills a gap in cross-border reporting which has tightened up considerably in recent years, the Department of Finance said. The initiative is designed to enforce tax laws more efficiently and deliver tax transparency.A joint statement welcoming the new pact was issued by the Department of Finance alongside Belgium, Brazil, Chile, Costa Rica, Finland, France, Germany, Greece, Iceland, Italy, Korea, Lithuania, Malta, New Zealand, Norway, Peru, Portugal, Romania, Slovenia, South Africa, Spain, Sweden, the United Kingdom and Gibraltar.“In recent years, tax policy developments have greatly enhanced cross-border exchanges of tax information and international co-operation between tax administrations, combating offshore tax non-compliance and tax secrecy on financial accounts,” it said.READ MOREShould you ever work for free? Yes, but go in with your eyes openFinancial services falling short on customersUncharacteristic radio silence from digital banksWe are told Ireland is getting wealthier – why are households not feeling it?Among that enhanced co-operation are agreements such as the Foreign Account Tax Compliance Act (Fatca) under which bank and other financial account information is automatically shared with the United States Inland Revenue Service (IRS) and Common Reporting Standard developed by the OECD which does precisely the same for the 101 countries that have signed up to it – including Ireland. Under this standard, financial services firms – including life companies, pension firms and investment houses – are obliged to report account information on non-residents to their own local tax authorities, which then pass it on to the investor/saver’s home tax authority.The is also a separate cryptoasset reporting framework.“Despite these significant advances in automatic exchange of information, there is not yet a mechanism for jurisdictions to exchange information on non-financial assets, especially immovable property,” the statement said.It said the new accord was about “recognising that ownership and transactions involving immovable property often have cross-border elements”.“We acknowledge the need for improved mechanisms to ensure that tax authorities have access to relevant information on immovable property assets held and income derived therefrom abroad to enforce tax laws effectively,” the countries said.“We therefore welcome the new Multilateral Competent Authority Agreement on Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA) between tax authorities developed by the OECD.”The “broad adoption” of the initiative was described as “an important step” towards delivering tax transparency on non-financial assets. “It will strengthen our ability to monitor and enforce tax compliance and to combat tax evasion, which undermines public revenues and unfairly shifts the tax burden on to compliant taxpayers,” the joint statement said.“We aim to join the IPI MCAA by 2029 or 2030, subject to domestic procedures as applicable. We also encourage other jurisdictions to join this initiative in the collective effort to promote transparency, fairness and efficiency in global taxation.” Minister for Finance Simon Harris welcomed the move. “Through the commitment made in this statement, Ireland will become an early adopter of an important tax transparency initiative which may be a foundation on which further action can be built,” he said.
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