Revenue Operational Manual
33.02.04
[33.02.04] Tax Avoidance
Settlement incentive
Updated June 2015
1. Legislation
Section 811A(2A) TCA 1997, as inserted by section 87(1)(b)(i) Finance Act 2014, allows
a taxpayer, who, on or before 23 October 2014, entered into a transaction to avoid tax, to
settle with Revenue by paying the tax or duty due and a reduced amount of interest.
This opportunity is strictly time-bound. After 30 June 2015, Revenue’s existing policy in
relation to challenging pre-24 October 2014 tax avoidance transactions will apply. That
policy is to actively challenge tax avoidance transactions and to litigate such cases in the
Courts where Revenue is of the view such a transaction is not effective in achieving the
intended tax advantage.
2. Availing of the settlement incentive
To avail of this opportunity, a taxpayer must make a “qualifying avoidance disclosure”
(“QAD”) in writing to the Revenue Commissioners on or before 30 June 2015. There
will be no extension to this date. Any disclosure received after that date is not a
qualifying disclosure.
QADs must be made to the QAD Unit in Large Cases Division.
Any taxpayer who has a query in relation to this settlement incentive should be told to
contact the QAD unit directly. Their contact details are:
Qualifying Avoidance Disclosure Unit,
Large Cases Division,
Ballaugh House,
73-79 Mount Street,
Dublin 2.
Email: qad@revenue.ie
Phone: 01-6131507
3. Publications
An e-brief will issue shortly confirming the details of the incentive such as the benefits of
making a QAD and how to make a QAD. In brief, these are:
3.1.
Benefits of making a QAD
Where a taxpayer makes a QAD:

the interest that would otherwise be payable is reduced by 20%,

the 10% or 20 % surcharge (under section 811A) will not apply, and
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
3.2.
33.02.04
No penalty will apply if Revenue accepts that a disclosure is a QAD that
relates to a tax avoidance transaction.
How to make a QAD
A QAD is very similar, in form and content, to a qualifying disclosure under the
Code of Practice for Revenue Audit and Other Compliance Interventions. A QAD
must be made in writing and must:

provide complete information about, and full particulars of, the tax
avoidance transaction;

contain a declaration that, to the best of the taxpayer’s knowledge,
information and belief, the disclosure is correct and complete;

be accompanied by payment of all the tax due;

be accompanied by payment of 80% of any interest due; and

be signed by or on behalf of the taxpayer.
Disclosures should be made using a Form QAD1 or Form QAD2 (continuation
sheet), which will be available on the website, and submitted to the QAD unit in
LCD.
3.3.
What Qualifies?
The settlement opportunity is available in relation to transactions which were put
in place to avoid tax and which commenced on or before 23 October 2014. The
types of transactions that qualify are:
1.
Tax avoidance transactions within the meaning of section 811 of the TCA
1997 (“section 811”), that is, transactions where a nominated officer of the
Revenue Commissioners has formed an opinion under that section.
2.
Transactions that, had the Revenue Commissioners formed an opinion
under section 811, would have led to a liability to tax under that section.
It may not be immediately obvious to a taxpayer, who has engaged in a tax
avoidance transaction and who has not received a notice of opinion under
section 811, whether or not a qualifying avoidance disclosure may be made
in relation to that transaction. Appendix 1 provides some further guidance
on this point.
3.
VAT avoidance transactions that are being challenged or could be
challenged by Revenue under the “Abuse of Rights” principle.
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33.02.04
Appendix 1
Further guidance for paragraph 3.3, sub-paragraph 2
It may not be immediately obvious to a taxpayer who has engaged in a tax avoidance
transaction, but who has not received a notice of opinion under section 811, whether or not a
qualifying avoidance disclosure may be made in relation to that transaction. The following is
intended to provide some further guidance on this point:
(i)
A qualifying avoidance disclosure may be made in respect of a transaction that had the
Revenue Commissioners been fully aware of all relevant facts and circumstances and
had they considered these facts and circumstances, they could have formed an opinion
under section 811. This applies both where Revenue is already aware of the
transaction, even if this awareness is limited, and where Revenue is not currently aware
of the transaction.
(ii)
A qualifying avoidance disclosure may also be made in relation to a transaction that is
being challenged (including where assessments have been made or amended) under
legislation other than section 811, but which, had Revenue formed an opinion under
section 811, would have given rise to a tax liability under that section.
The settlement opportunity does not apply where tax fraud arises (e.g. where a taxpayer
claims that a loan or investment was taken out or made when, in fact, this was not the
case).
Paragraphs (a) and (b) give examples of some of the transactions that are being, or
could be, challenged under legislation other than section 811 and which could qualify
for the settlement opportunity. These examples are not intended to be exhaustive.
(a)
Transactions that fail to meet a bona fide commercial test and/or a requirement
that the transaction is not part of a scheme or arrangement the main purpose, or
one of the main purposes, of which is the avoidance of tax. This includes
transactions that are being challenged or that are capable of being challenged
under the following provisions:

Section 242A(2)(c) or(4)(b)TCA 1997: tax treatment of certain royalties

Section 247(4A) TCA 1997: relief to companies on loans applied in
acquiring interest in other companies

Section 248(3) TCA 1997: relief to individuals on loans applies in
acquiring interest in companies

Section 248(3) as applied by section 250 TCA 1997: extension of relief
under section 248 to certain individuals in relation to loans applied in
acquiring interest in certain companies

Section 267K(1) TCA 1997: interest and royalties directive

Section 291A(7)(c) TCA 1997: intangible assets

Section 436A TCA 1997: certain settlements made by close companies

Section 546A TCA 1997: restriction on allowable losses

Section 586(3)(b) TCA 1997: company amalgamations by exchange of
shares

Section 587(4)(b) TCA 1997: company reconstruction and amalgamations
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(b)
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
Section 80(4) SDCA 1999: reconstruction or amalgamations of companies

Section 598(8) TCA 1997: disposal of business or farm on ‘retirement’

Section 600(6) TCA 1997: transfer of a business to a company

Section 624(1)(b) TCA 1997: exemption from charge under section 623 in
case of certain mergers

Section 739H(1B) TCA 1997: investment undertakings: reconstructions
and amalgamations

Section 41(2) SDCA 1999: conveyance in consideration of sale

Section 36 CATCA 2003: dispositions involving power of appointment
Transactions where the dispute centres or could centre on the interpretation of the
legislation. This includes transactions that are being challenged, or that are
capable of being challenged, under the following provisions:

Section 81A TCA 1997: restriction of deductions for employee benefit
contributions

Section 130(3) TCA 1997: matters to be treated as distributions

Section 590 TCA 1997: attribution to participators of chargeable gains
accruing to non-resident company

Section 806 TCA 1997:charge to tax on transfer of assets

section 807A TCA 1997: liability of non-transferors

Section 811B TCA 1997: tax treatment of loans from employee benefit
schemes

Section 812 TCA 1997: taxation of income deemed to arise from transfers
of right to receive interest from securities

Section 813 TCA 1997: taxation of transactions associated with loans or
credit

Section 814 TCA 1997: taxation of income deemed to arise from
transactions in certificates of deposit and assignable deposits

Section 815 TCA 1997: taxation of income deemed to arise on certain
sales of securities

Section 816 TCA 1997: taxation of shares issued in place of cash
dividends

Section 817 TCA 1997: Schemes to avoid liability to tax under Schedule F

Section 817A TCA 1997: Restriction of relief for payments of interest

Section 817B TCA 1997: treatment of interest in certain circumstances

Section 817C TCA 1997: restriction on deductibility of certain interest

Section 8 CATCA 2003: disponer in certain connected dispositions

Section 44 CATCA 2003: arrangements reducing value of company
shares
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