Our Ref:
Your Ref:
BFD/MD
I2015/688
27 January 2015
By Email: Kieran.lenihan@oireachtas.ie
Mr Kieran Lenihan
Clerk to the Joint Committee on Finance,
Public Expenditure and Reform
Joint Committee on Finance, Public Expenditure and Reform
Leinster House
Dublin 2
Dear Mr Lenihan,
Thank you for the invitation to brief the Joint Committee on Finance, Public Expenditure and Reform on
the issues that are of concern arising from the draft Heads of the Finance (Tax Appeals Commission)
Bill.
Please find attached a copy of our proposed opening statement to be made to the Chairman and
members of the Joint Committee at 4.00pm today.
Please do not hesitate to contact me should you have any queries.
Yours sincerely
Brian Duffy
Direct Dial: +353 -1- 639 5156
E-Mail: brian.duffy@williamfry.ie
Cc: fincom@oireachtas.ie (FAO: Ms Noeleen Kelly)
Opening statement of Mr Brian Duffy of William Fry Tax / Taxand Ireland to Joint Committee on
Finance, Public Expenditure and Reform concerning draft Heads of Finance (Tax Appeals
Commission) Bill.
Thank you for the opportunity to address you to today. I am a Tax Partner in William Fry Tax / Taxand
Ireland and have experience in tax litigation matters.
In general we welcome many of the proposals in the draft Heads of the Bill. We would like more clarity
in some areas and the main proposals we would have concerns with are:
(i)
(ii)
(iii)
the holding of tax appeal cases in public;
the removal of the right to a full rehearing in the Circuit Court; and
the proposed case stated procedure.
Areas to be welcomed:
Independence of the Tax Appeal Commission
In order to have an effective tax appeal system in Ireland the Tax Appeal Commission (the
“Commission”) must be, and be seen to be, a totally independent body. Any measures enabling the
development of a wholly independent appeals body are to be welcomed.
Withdrawal and dismissal of appeals – 949G
This section gives legislative effect to the pre existing practice set out in the Revenue’s operational
manual: “Tax and Duty of Appeals Manual”. The placing of these procedures on a statutory footing is to
be welcomed.
Flexible proceedings – 949H
A flexible approach to tax appeals is practical, and is to be welcomed. There may be an opportunity
here to include reference to the burden of proof. We do not believe that the burden should rest on the
taxpayer in all circumstances, and should be assessed on a case by case basis as a preliminary matter
by the Appeal Commissioner.
Pre-hearing proceedings – 949Q(g) & 949T
It is clear that a significant focus of the new legislation is on settling the matter before reaching a
hearing; mechanisms which enable this such as deciding the issue at a preliminary hearing and
adjudication without a hearing are positive developments, so long as the taxpayer always maintains the
right to choose a full hearing before the Appeal Commissioner. Such mechanisms, if utilised by parties
should reduce waiting times and make the tax appeal system more efficient.
Determinations
It is essential that a comprehensive database of decisions is created. We submit it is possible to
achieve this without the introduction of public hearings. Taxpayers and their advisors should have
access to previous determinations as it would assist them from the outset in deciding whether it is
appropriate to take an appeal against any matter in the first place.
While it is a positive improvement that the new Bill envisages the Appeal Commissioners furnishing the
parties with copies of previous determinations being relied on by the Appeal Commissioner, we submit
that this should not negate the necessity for a comprehensive body of decisions being made available
to the public.
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Areas to be clarified / Requiring further clarification:
Temporary Commissioners
This Section should outline specific criteria as to when a Temporary Commissioner should be
appointed. As we set out in our submissions, a defined set of criteria is necessary to ensure that
Temporary Commissioners are in fact utilised.
We note that the Bill does not envisage a body of suitably qualified persons being formed from which to
appoint the Temporary Commissioner; the utilisation of Temporary Commissioners may be easier and
more efficient.
Notice of Appeal – 949I
The section does not appear to include a time limit in which the taxpayer must issue a notice of appeal.
For the sake of clarity it is suggested that a time limit be inserted.
The removal of the requirement under the current Section 933 TCA that the taxpayer must first notify
the Inspector of Taxes is a positive development.
Valid Appeal - 949J
It is suggested that the definition of appealable matter be made clearer.
Refusal to accept an appeal – 949N
The wording is currently very subjective and in order to safeguard the taxpayer we suggest that an
objective reasonable standard should be required. For example, where the Appeal Commissioners
“conclude on reasonable grounds that an appeal is without substance or foundation”. Denying a
taxpayer access to a hearing must be done in an objective and transparent manner.
Main areas of concern:
Public Hearings – 949Y
In our opinion the introduction of the public hearing of tax appeal cases before the Appeal
Commissioners will constitute a disincentive to taxpayers appealing a tax matter on the basis that
individuals and corporates generally wish to maintain privacy over their tax affairs and finances.
The grounds listed as reasons for holding a hearing in private/in camera are very limited and vague (for
example, in the interests of public order and national security). In addition the threshold for maintaining
an application based on these grounds is unclear.
If it is ultimately felt necessary to introduce public hearings, we submit the reporting of these hearings
should be restricted, in order to protect the privacy of the taxpayer. For example, in family law
proceedings although reporters are allowed access to hearings, their reporting cannot identify the
parties expressly or implicitly.
In addition, a party to the proceedings may apply to the court to have reporters excluded on the basis
that the facts of the case are so specific any degree of reporting would identify the parties.
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Appealing against determinations of the Appeal Commissioners – 949AM & 949AN
We fundamentally disagree with the removal of the right for a full rehearing before the Circuit Court. It
removes a fundamental safeguard to the taxpayer. An appeal by way of case stated is a very specific
form of legal appeal – based solely on a point of law. Therefore, the taxpayer has no general right of
appeal against the decision of the Appeal Commissioners which is highly unusual in the context of
judicial or quasi judicial proceedings.
Concerning the procedure envisaged at Section 949AN – its not clear from the new Bill but in our
opinion the parties to the proceedings should be given a right to agree to the content of the case stated
drafted by the Appeal Commissioner before it is transmitted to the High Court. We also believe that if
the Appeal Commissioner drafts the case stated then the Appeal Commissioner should transmit it to the
High Court.
Costs
As set out in our submissions, we believe that the Appeal Commissioner should have the power to
award costs in line with the principles in general litigation, namely that the costs should follow the event.
Evidence – 949AC(b)
We query the appropriateness of the ability of the Appeal Commissioners “to admit evidence whether or
not the evidence would be admissible in proceedings in a court of law in the State” – it has the potential
to deny parties fair procedures by giving too much of a carte blanche to the Appeal Commissioner.
The criteria for the admission of evidence should be based on more objective grounds – for example,
evidence should be admissible if it is reasonable to consider that the admission of evidence is
necessary to decide the matter.
Dated 27 January 2015
WF-11297918-3
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