Revenue Note for Guidance
891L Implementation of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation in relation to joint audits
Summary
Section 891L transposes Article 12a of Council Directive (EU) 2021/514 (DAC7), which amends Directive 2011/16/EU on administrative cooperation between EU Member States in the field of taxation (DAC). Section 891L provides a legal basis for the competent authorities of other Member States to request the Revenue Commissioners to carry out a joint audit on an Irish resident taxpayer who is of common or complementary interest to the competent authorities of the Member States involved.
Details
Definitions
(1) Terms used in the section, including “authorised officer”, “Directive”, “foreign tax official”, “joint audit” and “nominated officer” are defined.
An “authorised officer” is defined as an officer authorised for the purposes of section 905 TCA,
“Directive” means Council Directive 2011/16/EU of 15 February 2011 on Administrative Cooperation in the field of taxation (the DAC), as amended;
A “foreign tax official”, means an official of the competent authority which has requested the joint audit, who is authorised by that authority to interview individuals and examine records, or who is authorised under the Directive to assist or represent an official who is carrying out the aforementioned functions. The latter category is intended to cover, for example, officials who may assume the role of an interpreter for the purposes of the joint audit.
“Joint audit” is defined as an administrative enquiry jointly conducted by the Revenue Commissioners and the competent authority of the requesting Member State and which is linked to one or more persons of common or complementary interest to both parties.
“Nominated officer” means a foreign tax official who is authorised by the Revenue Commissioners under this section to conduct a joint audit.
(2) The competent authority of another Member State can request the Revenue Commissioners to carry out a joint audit.
(3) The Revenue Commissioners are obliged to respond to a request for a joint audit within 60 days.
(4) The Revenue Commissioners can refuse a request for a joint audit where there are justified grounds for doing so.
(5) The Revenue Commissioners can authorise in writing, a foreign tax official, to be a nominated officer for the purposes of conducting a joint audit and performing certain functions for that purpose. A foreign tax official who is authorised under this section is known as a “nominated officer”.
(6) A written authorisation issued to a “foreign tax official” must contain the name, signature and photograph of the foreign tax official, as well as a statement that the foreign tax official is an official of the requesting competent authority and a nominated officer. A written authorisation will also contain details of the authorisation under this section, the name of the taxpayer being audited, a hologram of the logo of the Revenue Commissioners and a facsimile signature of a Revenue Commissioner.
(7) The manner in which a joint audit is to be carried out must be pre-agreed and coordinated between the Revenue Commissioners and the requesting competent authority. It must also be conducted in accordance with this Act and any other relevant Irish legislation and any other procedures that apply to domestic interventions, such as the Code of Practice for Revenue Compliance Interventions.
(8) The Revenue Commissioners will appoint an Irish Revenue officer who will have responsibility for supervising and coordinating the joint audit.
(9) A nominated officer may accompany an authorised officer of the Revenue Commissioners during a joint audit and, for the purposes of that joint audit, a nominated officer may interview individuals and examine records. A nominated officer can only carry out these activities while accompanied by an authorised officer, that is an Irish Revenue officer duly authorised under section 905 TCA. The exercise of these powers is, however, subject to subsections (10), (11) and (12).
(10) A nominated officer cannot perform any function provided for in this section where to do so would exceed the scope of functions granted to that officer under their domestic legislation. This ensures that the powers a nominated officer can exercise in Ireland is restricted to the lesser of either the powers granted to that officer under this section or those provided for by the laws of their own Member State.
(11) Notwithstanding the power conferred on a nominated officer to interview individuals, there is no requirement on any individual to provide replies or explanations to a nominated officer where to do so would require the taxpayer to disclose information covered by legal professional privilege, information of a confidential medical nature or professional advice of a confidential nature given to a client, other than advice given as part of a dishonest, fraudulent or criminal purpose.
(12) A nominated officer cannot, without the consent of the occupier, enter any premises or part thereof that is used as a private residence unless the accompanying Revenue officer has obtained a warrant under section 905 TCA and the nominated officer is named on that warrant.
(13) A person who fails to comply with any requirement of a nominated officer exercising the powers conferred on that officer under section 891L TCA is liable to a penalty of €4,000.
(14) A nominated officer, when requested, is required to produce their written authorisation under this section and the relevant authorisation from the requesting authority, stating their identity and official capacity.
(15) The production by a nominated officer of their written authorisation in response to a request under subsection (14) is to be taken as evidence of their authorisation under section 891L TCA and such production will satisfy the obligation under subsection (14) to produce that authorisation.
(16) An authorisation issued to a foreign tax official under section 891L will be valid for the duration specified in the authorisation itself but for no longer than the duration of the joint audit for which it was issued. A written authorisation may also, at any time, be withdrawn by the Revenue Commissioners.
(17) The Revenue Commissioners and the requesting competent authority are obliged to make every effort to agree the facts and circumstances relevant to the joint audit and the tax position of the person who has been audited based on the results of the joint audit.
(18) The Revenue officer with responsibility for supervising the audit and the nominated officer are required to prepare a final report at the conclusion of the joint audit. This report should contain the findings of the joint audit and set out the issues on which both parties agree. The person who has been subject to the joint audit must also be informed of its outcome and given a copy of the final report within 60 days of the date on which the final report issues.
(19) The Revenue Commissioners are obliged, when taking any actions on foot of a joint audit, to take account of the issues agreed during the course of the joint audit.
(20) A person subject to a joint audit has the same rights and obligations as that person would have in the case of a Revenue compliance intervention, including the same rights in relation to complaints, review, and appeals.
(21) The Revenue Commissioners can delegate to any of their officers any of the functions to be performed by the Revenue Commissioners as the competent authority of the State under this section.
(22) Any words or expressions used in the section and also used in the Directive will, in general, have the same meaning as they have in the Directive.
(23) Certain provisions of section 851A (which provides for the confidentiality of taxpayer information) apply to nominated officers and former nominated officers as they apply to Revenue officers.
- Nominated officers or former nominated officers are obliged to maintain the confidentiality of taxpayer information and to only disclose that information in accordance with section 851A or as otherwise provided for in another statutory provision (section 851A(2))
- A nominated officer or former nominated officer will be guilty of an offence, liable to a fine of €3,000 on summary conviction or €10,000 on conviction on indictment where that officer knowingly provides or allows to be provided to any person any taxpayer information, allows any person to access such information or uses such information otherwise that in the course of administering or enforcing the Acts (section 851A(3)).
- A nominated officer or former nominated officer will not be required to give or produce evidence in connection with any legal proceedings (section 851A(4)).
- As is the case for Revenue officers, there are a number of circumstances where a nominated officer of former nominated officer may disclose taxpayer information. These include—
- Disclosure for the purposes of any enquiry under the Tribunal of Enquiry (Evidence) Acts 1921 to 2002,
- Where the taxpayer information disclosed relates to the person to whom it is disclosed,
- Where the taxpayer consents to the disclosure, and
- Where the information is not taxpayer information.
(23A) The rights and obligations of an Irish Revenue officer participating in a joint audit in another Member State will be determined under the laws of the Member State where the joint audit takes place. However, an Irish Revenue officer cannot exercise any powers that exceed the powers conferred on them by Irish law.
(24) Section 891L applies in respect of periods (within the meaning of section 1077F TCA) beginning on or after 1 January 2024. The earliest period for which a joint audit request can be made is January 2024.
Relevant Date: Finance Act 2024