Mandatory Disclosure of Certain Transactions Regulations 2011 (S.I. No. 7 of 2011) under section 149 of Finance Act 2010 have been created. Section 149 of the Finance Act 2010 inserted a new Chapter into Part 33 of the Taxes Consolidation Act 1997 (which deals with certain anti-avoidance provisions) relating to a new Mandatory Disclosure regime.
The legislation places obligations on promoters of certain tax related transactions to give details of those transactions to the Revenue Commissioners explaining how the transaction/scheme is intended to work. The transactions affected are those that have as a main benefit the obtaining of a tax advantage and that match certain features set out in the Regulations. The main objective of the disclosure regime is to alert Revenue of tax avoidance schemes that may be unacceptable so that such schemes can be closed down by legislative action.
The Regulations, made with the consent of the Minister for Finance, set out various operational aspects of the disclosure regime, including the information to be disclosed and the manner in which it is to be provided, the time by which it must be disclosed, the classes of transaction that come within the disclosure requirements and the circumstances in which a person is not to be considered a promoter.
The information has to be provided within tight timescales (generally within 5 working days of a scheme being first marketed or made available for use by a person) and severe penalties will apply where a person fails to meet their obligations in that regard.
In certain limited circumstances, a user of such schemes is required to provide the information i.e. where the promoter is offshore, where the promoter claims legal professional privilege or where the user has entered into a scheme not involving a promoter.