Surge in Revenue domicile tax inquiry targets

The number of wealthy individuals being pursued by the Revenue Commissioners for not paying a €200,000 domicile levy has more than quadrupled since last year.

Since 2012 the levy applies to Irish-domiciled individuals with a worldwide income of €1 million or more, Irish property assets over €5 million and an annual income tax liability less than €200,000.

Documents obtained by The Irish Times under Freedom of Information rules show that seven people were under inquiry in 2012. However, the Revenue Commissioners have since confirmed that there are now currently 33 people under inquiry.

A Revenue spokeswoman said that inquiries were being made where a domicile levy return had not been filed and the person concerned had been identified as having a possible requirement to file such a return.

She added that Revenue expected the number of people under inquiry to increase as its compliance programme proceeded.

More than €2.3 million was collected from 14 people who submitted domicile levy returns during the 2011 tax year and about the same amount was collected from 16 people the year before.

Fianna Fáil spokesman on finance Michael McGrath said he was glad Revenue was now paying attention to the issue.

“I was surprised by the low yield that the domicile levy has raised since its introduction,” he said.

“Intuitively, I would have expected that the number of people paying the levy to be higher. I think Revenue would have now shared that view.”

The Cork TD said 33 individuals under inquiry for not paying the levy indicated there were at least some people eligible but not paying.

A Department of Finance spokesman said the full effects of the domicile levy could not be measured by the number of returns alone and until Revenue's programme had been completed it was not possible to ascertain the level of compliance.

“The levy may have led to behavioural changes resulting in some individuals increasing their Irish income tax liability to €200,000 at which point they would no longer be liable,” he said.

People who spend less than 183 days in Ireland during the tax year are considered non-resident for tax. This also applies to people who spend less than 280 days in Ireland over a period of two consecutive tax years.

The Government also introduced a levy on any person who is domiciled (ie where a person lives with the intention of remaining there permanently) in Ireland.

However, a tax consultant and author of several books on Ireland's tax code, Alan Moore, said that the measure had not been very effective.

“It doesn’t really work,” Mr Moore said.

“It only catches a few people. Theoretically, a person with assets of €2 million in Ireland and worldwide assets of €100 billion could still pay no tax.”