Proposed amendments to Tax Appeals system

Proposed amendments to the current system for tax appeals have been criticised by the Irish Tax Institute which warned the moves would make Ireland 'a European outlier' in the area. Currently appeals and determinations are invariably anonymous and redacted but proposed changes would give Appeal Commissioners the discretion to decide if a tax appeal hearing should be held in public or in private and limit the redaction of TAC determinations to cases where there are “special and limited circumstances”.

What are your views on the proposed amendments contained in the General Scheme of the Finance (Tax Appeals and Fiscal Responsibility) Bill 2025?

Contributor: Angela Fleming, Partner & Head of Financial Services Tax, BDO 

 

The right of appeal for taxpayers is a fundamental component of a well functioning tax system. Currently, when a matter is determined at the Tax Appeals Commission (TAC), the default position is that where a taxpayer desires a private hearing they can apply to the TAC and the Appeal Commissioners must accede to this request. Once the tax appeal is held in private, the published determination is anonymised to ensure taxpayer confidentiality.

There are many reasons why a taxpayer may desire confidentiality. Many appeals are brought by private individuals. It can be easily understood why a private individual would wish for their personal affairs to remain private. For companies and businesses, an appeal may necessitate the disclosure of confidential commercially sensitive information. Anonymising published determinations facilitates taxpayers exercising their fundamental right to disagree with an assessment raised by Revenue, while maintaining their privacy. The concern with the proposed changes is that it will deter taxpayers from appealing, and compel them into agreeing to tax liabilities that they consider are not due.

The background to the proposed changes is a Supreme Court judgement 2021 Zalewski vs WRC which found that the “absolute ban” on public hearings at the WRC was unconstitutional. The TAC, however, as discussed above, does not currently have such an “absolute ban” and so the proposed amendments to the governing legislation appears to be an over-correction.

The Irish Tax Institute has undertaken comprehensive comparative research on the tax dispute resolution processes which exist in 20 EU member states. That research found the overwhelming trend across EU jurisdictions is that published tax appeal decisions, where such publication takes place, are anonymised or redacted to protect taxpayer privacy. Therefore, the existing Irish tax appeal regime is in line with within the European norm.

Finally, the publication of tax appeal determinations provide transparency to the public, enabling understanding of how decisions are made, and how the law is applied, and providing important precedent to taxpayers. Deterring taxpayers from appealing would reduce the number of published determinations and, as a result, has the potential to diminish public trust in our tax system.

Content published in Finance Dublin Irish Tax Monitor.