tax evasion

[catnic]

hello,im a long time reader of this fine forum and i was wondering, in light of recent headlines concerning tax evasion, can someone pls satisfy my curiosity as to what exactly differentiates a 'bogus' non resident account and a bona-fida non resident ac.
what were the benefits of being non resident and holding such accounts?
curious

 

[CCOVICH]

A 'bogus' non-resident account was/is a non-resident account held by an Irish resident (for tax purposes).

Only non-residents were/are entitled to have a non-resident account.

No DIRT would have been deducted on non-resident accounts.

 

[roker]

You can hold a non resident account in another country ie UK but if you are resident in Ireland you must still declare the interest for tax, so there is not much point in it.

 

[CCOVICH]

Of course. I should have said:


"Only non-residents were/are entitled to have a non-resident account with an Irish financial institution"

 

[Chris]

There are very good points for holding non-resident accounts abroad, especially in the UK where interest rates on savings a higher due to the higher central bank rates. Other reasons like having all your cash being secured by the German Central Bank if in a German savings account (not just 20.000) are also benefitial.

 

[elcato]

Of course the other obvious reason for these people to hold non-resident accounts was to put undeclared income such as 'cash jobs' into them thus avoiding awkward questions if/when the revenue decide to do an audit.

 

[WizardDr]

Actually if anybody read the basis of the non resident accounts which were carried into the then Income Tax Act 1967 (as amended) you would have realised that there were plenty of legitimate reasons why a resident of Ireland could have held a non-resident account. Simple example - not the beneficial owner.

If you followed the legislation then into 1986 Finance Act you would also see that the Revenue had powers to examine the Declaration that was required to be on file.

Interestingly, the Revenue did not examine a single declaration in a 14 year period.

Those that did get examined by the C&AG, the offending declarations were usually technically unsound and that was the basis for attacking the banks.

Why the Revenue did not accept the responsibility for requiring people to go through them to verify the declarations at the start, is a big unanswered question.

The fact that 2m credit union members largely never declared their dividends for tax purposes is of course the same issue. That too went straight under the carpet.