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Penalties of €108K ordered against defaulter of VAT and income tax

By: Shane Kiely BL

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High Court determines that a taxpayer was liable to a penalty in the amount of €108,423, on the grounds that, on the balance of probabilities, he had been in deliberate default with regard to payments of VAT and income tax.

Applicant seeking a determination pursuant to s.1077B (3) of the Taxes Consolidation Act 1997 as inserted by the Finance (No. 2) Act 2008 that the respondent herein is liable to penalties in the total amount of €108,423.77 pursuant to s.1077E of the Taxes Consolidation Act 1997, s.27 of the Value Added Tax Act 1972, s.27A of the Value Added Tax Act 1972 and s.116 of the Value Added Tax Consolidation Act 2010 - respondent’s VAT liabilities have been quantified at €60,638 with a further fixed penalty of €125 for negligently failing to file VAT returns - income tax liabilities have been quantified for the period at €47,660.77 bringing a total penalty amount to €108,423.77 - applicant contends that this respondent has failed to file certain income tax and VAT returns - categories of person to whom a penalty might be imposed - respondent seeks to dispute a number of matters - statute itself sets out the parameters within which a penalty may or may not be imposed and accordingly any determination must operate within the same parameters - respondent does not come within categories of disclosure relating to “prompted qualifying disclosure” and “unprompted qualifying disclosure” - cannot be said on the facts of this case that there has been a full cooperation by this respondent to the applicant - subs. (3) of s.1077E and the similar criteria within s.27A and s.116 of the VAT legislation applies - position adopted by the respondent throughout is significantly more than careless - respondent found to be in deliberate default but not to 100% level that would result in a full imposition of the penalty - respondent is liable to penalties in the total amount of €108,423.77.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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