Revenue Note for Guidance

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Revenue Note for Guidance

904A Power of inspection: returns and collection of appropriate tax

Summary

This power enables Revenue to audit the deposit interest retention tax (DIRT) returns of financial institutions.

Details

(1) For the purposes of this section the definitions of “amount on account of appropriate tax”; “appropriate tax”; “deposit”; “interest”; “relevant deposit taker”; “relevant interest”; and “return” are imported from section 256. Definitions are also provided for “authorised officer”; “books, records or other documents”; “liability” in relation to a person; and “tax”.

(2) An authorised officer may at all reasonable times enter any premises or place of business of a relevant deposit taker (essentially a financial institution) for the purposes of auditing the DIRT return for a year of assessment.

(3) The audit procedures can include —

  • examination of the procedures put in place by the institution to ensure compliance with section 257(2) which states that —
    “A relevant deposit taker shall treat every deposit made with it as a relevant deposit unless satisfied that such a deposit is not a relevant deposit; but, where a relevant deposit taker has satisfied itself that a deposit is not a relevant deposit, it shall be entitled to continue to so treat the deposit until such time as it is in possession of information which can reasonably be taken to indicate that the deposit is or may be a relevant deposit.”.
    (A relevant deposit is one which is subject to DIRT.)
  • checking a sample of accounts which have been treated as being free of DIRT to determine whether —
    • the procedures referred to above have been observed in practice and whether they are adequate;
    • the institution is in possession of the appropriate declarations under section 263, section 263A, or section 246A(3)(b)(ii)(III) or the tax reference numbers referred to in paragraph (f)(ii) or (h)(ii) of section 256 and paragraph (b)(ii)(I) or (b)(ii)(II) of subsection (3) of section 246A; and
    • there is information in the institution’s possession indicating that the account should not have been treated as being free from DIRT.

(4) Should the audit indicate that an account should not have been treated as being free from DIRT the authorised officer can make such further enquiries as are necessary to establish whether this indicates that someone has a tax liability.

(5) The institution is required to afford reasonable assistance to the authorised officer in carrying out his or her duties under the section.

(6) & (7) An employee of the institution or, as the case may be, the institution itself can be liable to a penalty for failure to afford such assistance.

Relevant Date: Finance Act 2021