Revenue has set up special branch to monitor large firms

A special division of the Revenue is monitoring the affairs of the largest 343 businesses in the State, all of which have annual turnovers of more than €125 million, it was revealed yesterday.

The division, which is also monitoring the affairs of 250 individuals believed to be worth more than €50 million each, specialises in countering what it describes as "aggressive tax avoidance".

Tax avoidance is legal but the Revenue is constantly trying to close loopholes spotted by sophisticated tax planners.

A detailed paper on the operation of the Revenue's Large Cases Division was delivered at a conference in Dublin yesterday by the head of the division, Mr Seán Moriarty.

The division was set up late last year and has 240 employees.

The 343 businesses being monitored have a combined turnover probably significantly in excess of €50,000 million.

They would include branches of multinationals operating here such as Intel, Pfizer and Coca-Cola but also major Irish companies such as Cement Roadstone Holdings, Allied Irish Banks and the Kerry group.

The businesses would also include top Irish law and accountancy firms.

The top businesses were not named yesterday. The division is building up profiles of the business affairs of the 250 individuals and 343 companies and partnerships, to encourage compliance and develop an ability to spot emerging tax avoidance schemes.

Mr Moriarty said the Revenue has made it clear that its "most important initial target in the large case area is aggressive \ avoidance".

He said that by assigning staff to particular business sectors they will be able to build up "deep knowledge" of those sectors and of the major businesses and individuals working within them.

This will allow for "informed confrontation of poor compliance" as well as creating an understanding of "the mindset of the tax planner or avoidance scheme designer".

He said there was a "relatively high incidence of schemes of avoidance" among the large businesses and wealthy individuals being monitored.

Direct contact between the division and senior management in the top companies and partnerships has led to complaints from tax advisers, he said. Mr Moriarty was addressing a conference attended by the heads of the tax authorities from the 15 EU member-states and the 10 acceding states, the first such gathering of tax chiefs under the one roof.

He said that because of the large difference between corporate tax rates (12.5 per cent), gains and gift tax rates (20 per cent) and income tax rates (42 per cent), people were trying to shift income to the lower taxed categories.

Revenue monitors large turnover firms: page 16