Deloitte Tax Controversy insights on Revenue’s 2024 Annual Report

Significant increase in Level 2 Activity 

2024 saw a significant increase in Level 2 Audit activity by Revenue versus 2023. 2024 saw an increase of 230% in the number of Audit completed (233 versus 98 in 2023). The overall yield also increased by over 500% from €4.5m to €24.7m while the yield per Audit increased significantly from €50k to €106k.  

Revenue is also making use of the Level 2 Risk Review to explore perceived risks in a taxpayer’s returns. In 2023 2,442 of these completed versus 4,334 in 2024 - an increase of approximately 75%. Yield from Level 2 Risk Review interventions also increased by 277% from €27.8m to €77.1m while the yield per Risk Review increased from approximately €11k to almost €18k.   

As the Level 2 Risk Review is typically desk-based is focussed on a particular risk in a return and involves less resources from Revenue’s perspective versus an Audit, this difference in quantum of yield is consistent. It remains to be seen whether this differential will continue to influence Revenue’s approach to compliance activity going forward or whether we will see an increase in the more lucrative Level 2 Audits.   

Some of this increase in Level 2 activity is attributed to the fact that 2024 was only the second full year of the new CIF which took effect from 1 May 2022 and introduced the three categories of interventions (Levels 1, 2 and 3). At the end of 2023 many of the newly-introduced Level 2 interventions were likely still ongoing, having only initiated post 1 May 2022. However, when we combine the overall number of completed Level 2 interventions and the pre-1 May 2022 equivalent audits, year-on-year, there remains an increase in completion rates and yield. 2024 also saw an overall increase in Level 1 intervention activity and yield.  

The point to appreciate here is the marked increase in Revenue activity at “Level 2”, which has important implications for qualifying disclosures and tax defaulter publication.  

Note the numbers above include tax, interest and penalties and do not include non-CIF audit activity (e.g. customs audits and assurance checks).  

Influencers in the spotlight 

In a much-publicised campaign, during 2024 Revenue targeted influencers’ use of social media and other online platforms to conduct business activities. Through Level 1 and Level 2 interventions Revenue raised awareness of the tax consequences of the receipt of income, gifts, virtual currencies or tokens and the free use of goods or services. The campaign’s 52 interventions yielded over €2.6m (including over €670k in interest and penalties) – an average of €50,000 per taxpayer. The campaign was ongoing at the end of 2024.  

This is an example of Revenue recognising a risk in a particular sector, leveraging the publicly available data they have in respect of taxpayers and instigating a targeted intervention campaign with the dual aim of raising tax compliance yield and raising awareness/changing behaviour of an emerging risk in a developing sector. Other campaigns such as the ongoing national share schemes compliance project and serious tax evasion in the rental sector are also referenced.  

Revenue’s CCF 

At the end of 2024 there were 130 corporate groups in the CCF, an increase of five from 2023. In a continuing downward trend, the disclosure yield from CCF participants decreased from a high of €96m in 2022 to €7.6m in 2024. This suggests the CCF is operating as anticipated. With many groups being in the CCF for several years now, and the requirement for the groups to have the broad principles of a Tax Control Framework in place, their tax risk profile is decreasing with a resulting lowering in tax underpayments. It’s noted that Revenue’s report does not reference the piloting of CCF in Public Bodies during 2023, the expansion of which, the 2023 report noted, would be subject to ongoing review and evaluation during 2024. 

What should business consider in light of this increased Revenue activity?  

It’s clear from Revenue’s 2024 Annual Report that, post-COVID and with the phasing out of the Debt Warehousing Scheme, there is a marked increase in Revenue compliance activity and there is no sign of this trend abating so far in 2025.  

Rather than wait for a Revenue notification, taxpayers should anticipate Revenue scrutiny through a review of their tax affairs for any risks of underpayment and, if required, avail of the opportunity to voluntarily disclose these matters to Revenue by way of an unprompted qualifying disclosure. Such disclosures attract lower penalties and reduce the risk of publication on the tax defaulters list.  

Consideration should also be given to ensuring adequate processes and controls are in place to manage tax risk as details of such controls are increasingly being requested by Revenue during the intervention process. In particular, taxpayers in sectors perceived by Revenue as higher-risk should ensure they fully understand their tax obligations.  

Groups eligible to join Revenue’s CCF may wish to consider entering the voluntary program as, in the main, interactions under CCF are under the Level 1 category of intervention and a Level 2 intervention may only occur in exceptional cases (the example from Revenue being transfer pricing).  With the noted increase in Level 2 activity from Revenue, the CCF may become more attractive to such groups.