New Code of Practice for Revenue Compliance

On 1 May 2022, Revenue’s new compliance intervention framework will come into effect. The recently announced framework was developed by Revenue in an attempt to further curtail non-compliance under all tax heads.

The aim of the new framework is to encourage taxpayers to review their tax affairs and to address any issues on non-compliance prior to receiving contact from Revenue. The structure of the framework is comprised of three levels: Level 1 considers actions of self-correction and voluntary disclosures, meanwhile Levels 2 and 3 deal with the confrontation of non-compliance based on circumstances and behaviour of the taxpayer.

Level 1
The objective of Level 1 is to facilitate efficient self-correction and self-reviews of tax affairs, allowing for taxpayers to submit unprompted qualifying disclosures to Revenue without the need for any in-depth intervention on the part of Revenue.

Examples of the extent of intervention under Level 1 include:

  • Reminders of outstanding tax returns
  • Requests to conduct a self-review
  • Profile interviews
  • Engagement with businesses under the Cooperative Compliance Framework (CCF)

Level 2
The scope of Level 2 interventions can range from the examination of one single issue to a full Revenue audit. In their new framework, Revenue outline the two types of intervention that might arise under Level 2:

  • Risk Review
  • Audit

Risk Reviews are a new concept that focus on a risk or small number of risks on a tax return. This is a desk-based intervention and is essentially replacing the Revenue Aspect Query which is being retired with the introduction of the new framework. However, unlike Aspect Queries, there will be no option to submit an unprompted qualifying disclosure once notice of intervention has been issued.

The practices and procedures of an audit intervention will largely remain the same under the framework.

Level 3
Level 3 interventions will tackle high-risk cases suspected of fraud and tax evasion. Interventions take the form of a Revenue Investigation. Once a notice of investigation is received, the taxpayer may make a disclosure to Revenue but they will no longer have the benefit of submitting a qualifying disclosure

Code of Practice Update
The Code of Practice for Revenue Compliance Interventions contains a number of other miscellaneous changes which also come into effect alongside the new framework on 1 May 2022. The key changes include:

  • It is now required that Revenue are notified in writing of a taxpayer’s self-correction without penalty.
  • It is no longer satisfactory for a return to be amended on ROS without written notice.
    The time frame for submitting a notice of intention to prepare a prompted disclosure has been increased from 14 days to 21 days.
  • Where there is a tax underpayment or overclaim of refund that is less than €50,000, details of the taxpayer will not be published on the tax defaulters list. This is an increase from the previous €35,000 threshold
  • Taxpayers will now have 28 days to prepare for an audit, an increase from the previous 21 day time frame
  • Qualifying disclosures in respect of tax underpayments relating to offshore matters can now be submitted

Click Here to read Revenue’s Full Code of Practice

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.