817O Penalties

Summary

This section provides for penalties to apply where a person fails to comply with obligations under Chapter 3 and the regulations made under it. Flexibility is given to the Courts in terms of the absolute amount of penalty that may be imposed and the provision is also designed to allow the Courts, in determining the amount of a penalty, to take account of the fee income that the promoter is likely to have received from the scheme or the tax advantage the user of the scheme sought to obtain.

Details

(1)(a), (b) & (c) A penalty will apply where a person fails to comply with certain obligations under Chapter 3.

In relation to certain specified “lesser” failures the penalty is to be an initial amount of up to €4,000 and where the failure continues after that penalty is imposed, to a further penalty of €100 per day for every day that the failure continues.

In relation to a failure to include a Transaction Number on a tax return, the penalty is €5,000.

In relation to certain specified “greater” failures the penalty is to be a flexible initial penalty of up to €500 per day during the “initial period” as defined in subsection (2) and where the failure continues after that penalty is imposed, to a further penalty of €500 per day for every day that the failure continues.

(2) The “initial period” is defined as being essentially the period commencing on the day after the end of the period within which a promoter or person was obliged to provide specified information to Revenue on the disclosable transaction and ending on the day an application is made to the relevant court seeking the imposition of the penalty.

(3)(a) Revenue shall bypass the normal penalty procedures contained in section 1077B, and apply directly to the relevant court for the court to determine if a person named in the application has failed to comply with an obligation set out in subsection (1)(a), (b) or (c).

(3)(b) The “relevant court” means the District, Circuit or High Court as appropriate.

(4) A copy of the application to the Court made under subsection (3) shall be issued to the person named in it.

(5) The relevant court shall decide if the person referred to in the application is liable to the penalty and the amount of that penalty having regard to the requirements of subsection (6).

(6)(a) & (b) In determining the amount of the penalty to be applied the court shall have regard to the following –

• in the case of a promoter, to the amount of the fees received or likely to be received in connection with the disclosable transaction, and
• in any other case, to the amount of the tax advantage gained or sought to be gained from the disclosable transaction.

(7) & (8) There is provision for the application of section 1077C (relating to the making of an order by the court for the recovery of a penalty where it has determined that a penalty applies) and also for the non-application of section 1077D (proceedings against an executor, administrator or estate in the case of the death of a person in respect of whom the court has imposed a penalty).

Relevant Date: Finance Act 2021