Revenue Note for Guidance

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Revenue Note for Guidance

891B Returns of certain payments made by certain persons

Summary

This section is an enabling provision. It authorises the Revenue Commissioners to make regulations, with the consent of the Minister for Finance, to require financial institutions such as banks and assurance companies to make automatic annual returns to Revenue of the names and addresses of customers to whom they have made payments of interest and other profit type payments. The provision also applies to payments made by Government bodies.

Details

Definitions and Construction

(1) The first two definitions identify the persons who may be required by regulations to make returns of payments made by them. These are assurance companies (including foreign companies) and financial institutions (the definition of financial institution covers banks, building societies, An Post, credit unions, etc).

“PPS Number” is an individual’s Personal Public Service Number.

“relevant payment” will be defined in regulations made under the section as they are made in respect of different types of institutions and different types of payment.

“relevant person” are all those persons and bodies that are potentially subject to the requirement to report the payments they make to other persons. This includes assurance companies, banks and other financial institutions, and Governmental bodies.

“specified person” is a relevant person to whom specific regulations made under the section actually affects. Provision is made for the specified person to be any relevant person or some group or class of a relevant person. It was possible to introduce automatic reporting for all persons at the same time and this provision was designed to facilitate the phasing in of the reporting requirement if necessary.

“State savings products” are savings products offered by the NTMA and include Post Office Savings Bank accounts, prize bonds, savings certificates and bonds, etc.

“tax” is defined as any tax provided for under the Tax Acts or the Capital Gains Tax Acts. This is designed to ensure that the various withholding and exit taxes that apply to investment products are caught by the reference in addition to income tax, corporation tax and capital gains tax.

“tax reference number”, in the case of an individual, is his or her Personal Public Sector Number and, in any other case, either the tax reference number contained on any assessment or return sent to the person or the person’s VAT registration number.

(2) A number of construction provisions for both the section and any regulations made under the section are set out as follows:

  • Any amount credited rather than actually paid or any amount set off against any other amount are regarded as a payment.
  • The amount of any payment is to be taken as the gross amount before any deduction of any tax.
  • References in the section to regulations are to be construed as references to regulations made under subsection (3).

Requirement to automatic report payments

(3) The Revenue Commissioners are authorised to make regulations, having obtained the consent of the Minister for Finance, to provide for persons specified in the regulations to make a return to the Revenue Commissioners of the persons to whom they have made relevant payments and to include in such returns the person’s tax reference number.

(4) The matters which may be included in the regulations are (it is to be noted that the provision is permissive rather than mandatory):

  • Notifying person’s that they are required by the regulations to make returns.
  • Setting the date for which a particular return is to be made (it may be necessary or desirable to fix different dates in respect of different types of specified persons).
  • Requiring the returns to be sent to a particular Revenue office.
  • Defining the payments to be covered by the regulations.
  • Defining the persons or classes of persons in receipt of payments who are to be included in returns made under a particular set of regulations. This is intended to allow for some flexibility in relation to the type of persons who will be required to be reported.
  • Setting out the rules to be applied by the reporting person in determining the identity (i.e. name) and place of residence or establishment of a person to be reported.
  • Setting out the details in respect of a payment (e.g. the amount of the payment or possibly some identification of the asset in respect of which the payment is made, e.g., bank account number or policy number) which are to be included in a return.
  • Requiring persons subject to the reporting requirement to obtain tax reference numbers from persons with whom they are entering into a customer relationship which is likely to result in a payment subject to reporting. This requirement will be subject to such relations starting after a date to be set out in the regulations.
  • Requiring customers to provide a tax reference number to specified persons where a specified person requests such a number.
  • Defining records for the purposes of the regulations.
  • Laying down rules governing the manner of keeping records and setting out time limits for the keeping of records.
  • Requiring the production of records, etc, the provision of information, etc to authorised Revenue officers and requiring persons to give assistance to such officers and authorising such officers to make extracts or require copies of documents.
  • Providing for such supplemental and incidental measures needed to allow persons subject to the regulations to fulfil their obligations and for the general administration and implementation of the regulations, including the delegation of authority and the authorisation of officers for specific purposes.

(5) Regulations made under this section are to be laid before Dáil Éireann and to be annulled if a resolution to this effect is passed by Dáil Éireann.

Audit

(6) A power of entry to the premises of persons who are subject to the reporting requirement is provided to a Revenue officer authorised for the purpose by regulations. Entry is to be for the purposes of determining whether information included in a return is correct or whether information not included in a return was correctly not included. Such officers may also examine the procedures put in place by the person for the purposes of complying with the reporting obligation.

Penalties

(7) The penalties applicable under section 898O (that is, the penalties applied for failure to make a return, etc under the EU Savings Directive) to a failure to make a return under that section or to the making of an incomplete or incorrect return under that section are applied for the purposes of this section. This is a penalty on the person required to make the return not on an employee. The penalty is a civil penalty and is fixed at €19,045 and applies where the person without a reasonable excuse fails to make a return with a further €2,535 for each day the person continues to fail to make the return.

A penalty is also provided for a person who fails to comply with a requirement of this section or of regulations made under the section. Any person who so fails will be liable to a civil penalty of €1,265.

Provision to avoid double reporting

(8) & (9) The returning of information under more than one provision is avoided.

Override of restriction on disclosure of information – Post Office Savings Bank Act 1861

Section 4 of the Post Office Savings Bank Act 1861 (which restricts the disclosure of information relating to deposits) will not apply to the disclosure of information required to be included in a tax return made under the regulations made under this section.

Relevant Date: Finance Act 2021