Substantial changes have been made to Ireland’s general anti-avoidance regime (GAAR) in an effort to simplify the procedures Revenue must follow to successfully withdraw a tax advantage from a taxpayer on the basis that the transaction constituted a tax avoidance transaction.  The changes will apply to transactions entered into on or after 23 October 2014.

The main changes effected by the New GAAR are as follows:

  • The requirement that a Revenue officer must form and issue an opinion that a transaction constitutes a tax avoidance transaction before being entitled to withdraw a tax advantage has been removed. A Revenue officer may now withdraw a tax advantage if it is reasonable to consider, based on certain considerations, that the transaction is a tax avoidance transaction.
  • There will be no time limit for raising a notice of assessment under the GAAR provisions.  
  • The surcharge which becomes payable on a Revenue finding that a transaction constitutes a tax avoidance transaction resulting in a tax advantage has been significantly increased from 20% to 30% of the amount of the tax advantage.
  • The protective notification regime remains; if a taxpayer files a valid protective notification within a prescribed timeline, no surcharge will apply. If the notification is filed outside the prescribed time limit, various reduced surcharges apply depending on the circumstances.
  • The taxpayer is now obliged to furnish all documentation pertaining to the transaction along with an opinion as to why the taxpayer believes the transaction does not fall within the general anti avoidance provisions.
  • The New GAAR removes the taxpayer’s right to appeal the opinion formed by Revenue that the transaction fell within the general anti-avoidance provisions on certain specified grounds.