Reduced rates of interest on tax repayments and new time limits on claims for tax repayments were signed into law yesterday by the Minister for Finance, Mr McCreevy.
The Minister made the commencement order for the new regime, which was announced in the Finance Act earlier this year.
The changes mean that there will be a general time limit of four years for claims for tax rebates, replacing existing limits of up to 10 years.
The Revenue's right to assessments will also be limited to four years, except in cases of fraud or neglect, where no limits apply.
The measures apply to claims for repayment of tax overpaid in respect of 2003 onwards, although transitional arrangements will be in place in respect of certain claims made up to January 1st, 2005.
The rate of interest on repayments will be cut from just under 6 per cent per annum to just over 4 per cent per annum, with a daily rate of 0.011 per cent.
"These changes will better balance the position of the tax claimant while safeguarding the position of the Exchequer," Mr McCreevy said.
Interest will be calculated from six months after an individual makes a valid claim, except where the claim arises from a mistake by the Revenue. In these cases, the interest will be calculated from the date the tax was overpaid or from the end of the tax period to which the claim relates, whichever is the later.
The interest rates on repayments apply from tomorrow.
In the case of preliminary tax, the reduced rates will apply to tax paid on or after November 1st, 2003, except where tax returns and payments are made through the Revenue's online service (ROS).
The deadline for 2002 tax returns and the payment of tax due is today, but users of the ROS system have an extension until November 21st. When calculating entitlement to interest, these returns and payments will be treated as if they had been received on October 31st.
