With the deadline for the Revenue’s Voluntary Disclosure Initiative approaching on September 15th, individuals and companies alike have just over two weeks to disclose funds invested in Deposit Accounts which have not been declared for tax purposes. Deloitte is recommending persons with money of over €100,000 in any combination of accounts in any financial institutions, including credit unions, to assess their situation to see if they should be disclosing their details.

The Voluntary Disclosure Initiative, announced by the Revenue in June of this year, covers funds invested in Deposit Accounts which have not been declared for tax purposes.  This initiative was introduced to tie in with new reporting requirements for banks, under which they are required to report details to Revenue of persons to whom interest or similar payments in excess of €635 was paid in any tax year.

Prior to this, Revenue would not have had details of persons receiving large amounts of deposit interest or similar income including credit union dividends, other than from the tax returns of the persons.   However, subject to some transitional arrangements, all financial institutions, including credit unions, will now be required to report all interest and similar payments in excess of € 635 pa to Revenue.  This will obviously include credit union dividend payments.     

This new Voluntary Disclosure initiative is aimed at those persons, including individuals and companies, who had in excess of €100,000 in aggregate on deposit in respect of which the financial institution will be making a return, at any time during 2005, 2006 or 2007.   Any such person who has undeclared tax liabilities on such monies is required to file a Notice of Intention to make a qualifying disclosure of a tax default prior to 15th September, with the final calculations, declarations and payment having to be submitted prior to 15th January 2009. To fully qualify for the benefits afforded under this initiative, the final declaration needs to include details of all other undeclared liabilities, from any source at any time - not just liabilities arising from such deposits.

“Many people may not be aware of this change in reporting for financial institutions – or the fact that monies in all financial institutions, including credit unions, needs to be declared. Therefore we are recommending all those potentially affected to determine if they should be availing of the voluntary disclosure initiative,” said Ann Dullea, Manager, Tax, Deloitte. “There are significant benefits afforded to those who avail of this including mitigation of penalties, non-publication of details in relation to the payment and non-prosecution in respect of the disclosure.”

The option of availing of the Voluntary Disclosure is not available to those (or one’s partner where jointly assessed) who are already subject to a Revenue investigation, those who previously held a Bogus non-resident account, anyone subject to an Ansbacker and NIB/CIM enquiry, persons previously required to make a disclosure relating to an offshore financial product or Single Premium Policy, or those who have come or may come under investigation arising from the Moriarty or Flood/Mahon tribunals. It is also worth noting that this initiative is not aimed at those who have immaterial PRSI liabilities on interest earned on these accounts.  

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