811D Transactions to avoid liability to tax: surcharge, interest and protective notifications

(1) For the purposes of this section—

‘chargeable period’ has the meaning assigned to it in Part 41A;

“disclosable transaction” has the meaning assigned to it in Chapter 3 of this Part but for the purposes of this section, a transaction shall not be a disclosable transaction if—

(a) the transaction was disclosable by a promoter, pursuant to Chapter 3 of this Part, and not by a person who enters into any transaction which is or forms part of a transaction which is disclosable under section 817F, 817G or 817H,

(b) by the specified return date, within the meaning of Part 41A, for a return referred to in section 817HA(3), the transaction was not assigned a transaction number, within the meaning of Chapter 3 of this Part, or the person, in whose name or on whose behalf a qualifying avoidance disclosure or a protective notification is made, was not provided with a transaction number by a promoter or marketer, within the meaning of Chapter 3 of this Part,

(c) the person in whose name or on whose behalf a qualifying avoidance disclosure or a protective notification is made provides a Revenue officer with the specified information, within the meaning of Chapter 3 of this Part, and

(d) the person in whose name or on whose behalf a qualifying avoidance disclosure or a protective notification is made, without unreasonable delay, provides a Revenue officer with any other information that the officer may reasonably require for the purposes of deciding if an application should be made to the relevant court under section 817O(3)(a);

“protective notification” means a notification—

(a) which is delivered in such form as may be prescribed by the Revenue Commissioners and to such office of the Revenue Commissioners as—

(i) is specified in the prescribed form, or

(ii) as may be identified, by reference to guidance in the prescribed form, as the office to which the notification concerned should be sent,

(b) which contains—

(i) full details of the transaction which is the subject of the protective notification, including any part of that transaction that has not been undertaken before the protective notification is delivered,

(ii) full reference to the provisions of the Acts that the person, by whom, or on whose behalf, the protective notification is delivered, considers to be relevant to the treatment of the transaction for tax purposes,

(iii) full details of how, in the opinion of the person, by whom, or on whose behalf, the protective notification is delivered, each provision referred to in the protective notification in accordance with subparagraph (ii), applies, or does not apply, to the transaction, and

(iv) full details of why, in the opinion of the person, by whom, or on whose behalf, the protective notification is delivered, section 811C does not apply,

(c) which includes copies of all documentation pertaining to the transaction which is the subject of the protective notification,

(d) which is received by the Revenue Commissioners on or before the relevant date, and

(e) which does not relate to a disclosable transaction,

and subsection (2) supplements this definition;

“qualifying avoidance disclosure” means a disclosure that a Revenue officer is satisfied is a disclosure of complete information in relation to, and full particulars of, all matters occasioning a liability to tax that gives rise to a surcharge referred to in subsection (3), made in writing to the Revenue officer and signed by or on behalf of that person and which is accompanied by—

(a) a declaration, to the best of that person’s knowledge, information and belief, made in writing, that all matters contained in the disclosure are correct and complete, and

(b) a payment of any tax due and payable in respect of any matter contained in the disclosure and the interest payable on the late payment of that tax;

“relevant date” in relation to a transaction means the date which is 90 days after the date on which that transaction was commenced;

“specific anti-avoidance provision” means a provision specified in Schedule 33.

(2) (a) Where the condition set out in paragraph (c) of the definition of ‘protective notification’ in this section cannot be complied with by reason of the fact that part of the transaction is undertaken after the relevant date, the condition shall be deemed to have been complied with if copies of the documentation pertaining to that part of the transaction are delivered to the office referred to in paragraph (a) of that definition within 30 days from their execution.

(b) Without prejudice to the generality of paragraph (a) of the definition of ‘protective notification’, the specifying, under—

(i) section 81 of the Value-Added Tax Consolidation Act 2010,

(ii) section 46A of the Capital Acquisitions Tax Consolidation Act 2003,

(iii) section 8C of the Stamp Duties Consolidation Act 1999, or

(iv) section 959P of this Act,

of a doubt as to the application of law to, or the treatment for tax purposes of, any matter to be contained in a return shall not be regarded as being, or being equivalent to, the delivery of a protective notification in relation to a transaction for the purposes of this section.

(3) (a) Subject to subsections (4) and (5), where—

(i) a transaction has been undertaken or arranged which would, but for section 811C or a specific anti-avoidance provision, as the case may be, give rise to a tax advantage, and

(ii) a person submits any return, declaration, statement or account or makes any claim which purports to obtain the benefit of that tax advantage,

then that person shall be liable to pay an amount (in this section referred to as the ‘surcharge’) equal to 30 per cent of the amount of the tax advantage and the provisions of Chapter 3A of Part 47, as they apply to penalties, shall apply with any necessary modifications to that surcharge.

(b) Paragraph (a) shall not apply in relation to a transaction where a person has, in submitting any return, declaration, statement or account or making any claim which purports to obtain the benefit of that tax advantage, incurred a penalty under ^[4]>section 1077E(2) or 1077E(5), section 116(2) or 116(5) of the Value-Added Tax Consolidation Act 2010^<[4][4]>subsection (2) or (5), as the case may be, of section 1077E or subsection (2) of section 1077F, as appropriate, subsection (2) or (5), as the case may be, of ^[5]>section 116 or subsection (2) of section 116A of the Value-Added Tax Consolidation Act 2010, as appropriate,,^<[5][5]>section 116 or subsection (2) of section 116A of the Value-Added Tax Consolidation Act 2010, as appropriate,^<[5]<[4] section 134A of the Stamp Duties Consolidation Act 1999 or section 58 of the Capital Acquisitions Tax Consolidation Act 2003.

(4) (a) Where the Revenue Commissioners have received a protective notification from, or on behalf of, a person then in relation to the transaction which was the subject of the protective notification—

(i) paragraphs (a), (b) and (c) of section 811C(6) shall not apply, and

(ii) where a Revenue officer, pursuant to section 811C(4), makes or amends an assessment to withdraw or deny a tax advantage arising out of or by reason of a tax avoidance transaction—

(I) the surcharge referred to in subsection (3) shall not apply, and

(II) any tax due and payable by a person as a result of the tax advantage being withdrawn or denied shall be deemed to be due and payable not later than one month from the date of the assessment or amended assessment as appropriate.

(b) Where a notification which purports to be a protective notification has been received by the Revenue Commissioners and a Revenue officer determines that the notification is not a protective notification, because it does not comply with one or more of the requirements set out in the definition of protective notification in this section, and—

(i) commences carrying out enquiries as if section 811C(6)(a) applied, a taxpayer who is aggrieved by such enquiries, on the grounds that the person considers that the officer was precluded from making that enquiry by reason of paragraph (a)(i), may appeal to the Appeal Commissioners^[2]> and subsections (5) to (8) of section 959Z^<[2][2]>, in accordance with section 949I, within the period of 30 days after the officer commences carrying out enquiries and section 959AJ^<[2] shall, with any necessary modifications, apply to that appeal, or

(ii) makes or amends an assessment as if section 811C(6)(c) applied, a taxpayer who is aggrieved by the making of such an assessment, or, as the case may be, such amendment, on the grounds that the person considers that the officer was precluded from making the assessment or, as the case may be, the amendment, by reason of paragraph (a)(i), may appeal to the Appeal Commissioners^[3]> and subsections (2) and (3) of section 959AF^<[3][3]>, in accordance with section 949I, within the period of 30 days after the date of the notice of assessment and subsections (2) and (3) of section 949AK^<[3] shall, with any necessary modifications, apply to that appeal.

(5) (a) Where a person makes a qualifying avoidance disclosure in relation to a transaction which is not a disclosable transaction, then—

(i) if a Revenue officer has not commenced any inquiry into the transaction and the disclosure is made within a period of 24 months from the end of the chargeable period in which the transaction was commenced, the surcharge referred to in subsection (3) shall not apply,

(ii) if a Revenue officer has not withdrawn or denied a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, the surcharge referred to in subsection (3) shall be 3 per cent,

(iii) if a Revenue officer has withdrawn or denied a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, and no appeal in relation to that withdrawal or denial has been made, the surcharge referred to in subsection (3) shall be 5 per cent,

(iv) if a person has made an appeal in relation to the withdrawal or denial of a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, and that appeal has not yet been heard by the Appeal Commissioners, the surcharge referred to in subsection (3) shall be 10 per cent,

and, if the case does not fall within any of subparagraphs (i) to (iv), then the surcharge referred to in subsection (3) shall be 30 per cent.

(b) Where a person makes a qualifying avoidance disclosure in relation to a transaction which is a disclosable transaction, then—

(i) if a Revenue officer has not commenced any inquiry into the transaction and the disclosure is made within a period of 24 months from the end of the chargeable period in which the transaction was commenced, the surcharge referred to in subsection (3) shall be 3 per cent,

(ii) if a Revenue officer has not withdrawn or denied a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, the surcharge referred to in subsection (3) shall be 6 per cent,

(iii) if a Revenue officer has withdrawn or denied a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, and no appeal in relation to that withdrawal or denial has been made, the surcharge referred to in subsection (3) shall be 10 per cent,

(iv) if a person has made an appeal in relation to the withdrawal or denial of a tax advantage under section 811C or a specific anti-avoidance provision, as the case may be, and that appeal has not yet been heard by the Appeal Commissioners, the surcharge referred to in subsection (3) shall be 20 per cent,

and, if the case does not fall within any of subparagraphs (i) to (iv), then the surcharge referred to in subsection (3) shall be 30 per cent.

(6) Where a person makes a protective notification, or a protective notification is made on a person’s behalf, then the person shall be treated as making the protective notification—

(a) solely, by virtue of the operation of subsection (4)(a)(ii), to prevent a surcharge or interest becoming payable by the person, and

(b) wholly without prejudice as to whether the transaction concerned was a tax avoidance transaction.

(7) This section shall not apply to a transaction if any part of it was commenced on or before 23 October 2014.