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Courts Get Tougher on Tax Evasion
The Irish courts have been taking a tougher approach on taxpayers found guilty of tax evasion. In the last number of months, two taxpayers have received prison sentences for defrauding the Revenue Commissioners and failing to pay taxes. Taxand Ireland discusses the two cases and what taxpayers need to to be mindful of going forward.
The first case involved customs duty evasion, with the taxpayer involved, directing his suppliers to issue false invoices describing garlic as apples. The rate of customs duty on apples is currently 9%; however the rate payable on garlic can be as high as 232%. The fraud allowed the taxpayer to evade approximately EUR1.6 million in tax. The judge sentenced him to six years in prison even after the taxpayer had engaged with the Revenue Commissioners and repaid tax and penalties.
In another recent case criminal proceedings were brought against a taxpayer who was involved in making incorrect tax returns and issuing cash payments to staff who continued to claim social welfare benefits. The judge issued a three year prison sentence, suspending the final year, and also imposed a EUR150,000 fine on his firm.
This tougher approach to tax evasion has seen the Revenue Commissioners stepping up their monitoring and inspection activities and more criminal proceedings being brought. Taxpayers are now receiving the type of prison sentences normally reserved for crimes such as robbery and manslaughter for serious tax evasion. The view of the courts seems to be that these offences are hard to uncover and the only effective deterrence is a lengthy prison term for those who are caught.
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