Ireland
This report analyses the implementation of the AEOI Standard in Ireland with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Ireland’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference. This includes Ireland’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Ireland’s Interested Appropriate Partners (CR2).
Effectiveness of AEOI in practice
Ireland’s implementation of the AEOI Standard is on track with respect to the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This includes ensuring Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and exchanging the information in an effective and timely manner (CR2). Ireland is encouraged to continue to evolve and refine its implementation process accordingly, to ensure its ongoing effectiveness.
Overall rating in relation to the effectiveness in practice: On Track
General context
Ireland commenced exchanges under the AEOI Standard in 2017.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Ireland:
amended Chapter 3 of Part 38 of the Taxes Consolidation Act, 1997 through Section 28 of the Finance Act 2014, to insert a new section 891F into the Taxes Consolidation Act, 1997;
enacted Statutory Instrument No. 583 of 2015 and Statutory Instrument No. 560 of 2016 (European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016);
made reference to the Criminal Justice (Money Laundering and Terrorist Financing)(Amendment) Act, 2018 implementing the FATF Recommendations for the purposes of the identification of Controlling Persons under the AEOI Standard.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2016 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2017.
With respect to the exchange of information under the AEOI Standard, Ireland:
is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2017;
has in place European Directive 2011/16/EU on Administrative Cooperation in the Field of Taxation as amended by Directive 2014/107/EU;
has in place European Union agreements with five European third countries1; and
put in place three bilateral agreements.2
Table 1 sets out the number of Financial Institutions in Ireland that reported information on Financial Accounts in 2021 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2021. In this regard, it should be noted that Ireland requires the reporting of Financial Accounts held by all non-residents and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Ireland’s administrative compliance strategy, which is analysed in the subsequent sections of this report.
Table 2 sets out the number of exchange partners to which information was successfully sent by Ireland in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Ireland’s exchanges in practice, which is also analysed in subsequent sections of this report.
In order to provide for the effective implementation of the AEOI Standard, in Ireland:
the Office of the Revenue Commissioners (the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Ireland’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by requiring Reporting Financial Institutions to register and submit CRS reports via XML files using the Revenue Online Service portal, which is a secure filing facility. The information is validated upon receipt using the record validation rules of the CRS Status Message XML Schema; and
the Common Transmission System (CTS) and in the European Union the Common Communication Network, are used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Ireland’s legal frameworks implementing the AEOI Standard concluded with the determination that Ireland’s domestic and international legal frameworks are In Place. This has been taken into account when reviewing the effectiveness of Ireland’s implementation of the AEOI Standard in practice.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Ireland are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Ireland’s domestic legislative framework is in place and contains all of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (SRs 1.1 – 1.3). It also provides for a framework to enforce the requirements (SR 1.4).
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Ireland has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Ireland has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Ireland has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Ireland has a legislative framework in place to enforce the requirements in accordance with the CRS and its Commentary.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Ireland’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Ireland’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Ireland and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Ireland has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Ireland put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Ireland’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Ireland are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Ireland’s implementation of the AEOI Standard is on track with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures and are therefore reporting complete and accurate information. This includes ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5), and collaborating with exchange partners to ensure effectiveness (SR 1.6). Ireland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Ireland implemented all of the requirements in accordance with expectations. The key findings were as follows:
Ireland has implemented an overarching strategy to ensure compliance with the AEOI Standard which is based on two pillars: i) the promotion of voluntary compliance and ii) compliance interventions. The first pillar consists of regular meetings with industry representative groups and the provision of guidance to Reporting Financial Institutions. The second pillar is based on Ireland’s compliance policy, which has been developed to set out the verification activities to be carried out, along with further internal guidance on how to carry them out and the areas of risk to focus on. Ireland bases its compliance strategy in a risk assessment process that takes into account a range of relevant information sources, such as existing risk assessment programs performed by the tax authority, the information reported by the Reporting Financial Institutions and feedback from partner jurisdictions. Ireland’s compliance strategy facilitates compliance and incorporates a credible approach to enforcement. Ireland intends to keep its compliance strategy and risk assessment under review to ensure its effectiveness on an ongoing basis.
Ireland has worked effectively to understand its population of Financial Institutions, including relevant non-regulated entities, utilising various relevant information sources, such as the Foreign Financial Institution list for FATCA purposes, the list of non-regulated financial institutions from the Central Bank of Ireland and lists of members of industry groups. Ireland takes action to ensure that Reporting Financial Institutions are classifying themselves correctly under its domestic rules and reporting information as required. Ireland intends to keep its understanding of its Financial Institution population up to date on a routine basis.
The Office of the Revenue Commissioners appears to have the necessary powers and resources to discharge its functions. With respect to resourcing, Ireland had initially integrated its AEOI Standard-related compliance activities into existing structures of the Office of the Revenue Commissioners. To strengthen its strategy, Ireland recently modified the structure and has created a dedicated AEOI compliance unit made up of five full time equivalent staff and two more that will join in the near future. This unit will carry out the compliance work for the largest Financial Institutions in Ireland related to the AEOI Standard and other AEOI initiatives, with the remaining ones still being covered by the integrated compliance programme. The staff have access to IT systems and tools which have recently been complemented to add new functionalities to support the compliance functions related to the AEOI Standard. Overall, they appear to have effectively implemented an operational plan to verify compliance with the requirements, incorporating appropriate compliance activities.
It appears that Ireland effectively enforces the requirements, including through the inspection of records of Reporting Financial Institutions and the application of dissuasive penalties and sanctions for non-compliance. It also appears that Ireland is ready to take effective action to address circumvention of the requirements if such circumvention is detected and has taken action to ensure self-certifications are obtained as required and to follow up on undocumented accounts.
Ireland will also keep its jurisdiction-specific list of Excluded Accounts under review to ensure it continues to pose a low risk of being used for tax evasion purposes. For this purpose, Ireland has held regular meetings with the pension sector and has observed that there is no significant increase in the number of these accounts held by non-residents.
Ireland does not have a jurisdiction-specific list of Non-Reporting Financial Institutions.
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
In terms of the Financial Account information collected and sent by Ireland, the presence of the key data points of the Tax Identification Numbers and dates of birth appeared to be in line with most other jurisdictions, as did the level of undocumented accounts.
One exchange partner highlighted issues with respect to the information received, such as accounts with no payments reported. Follow-up discussions confirmed that Ireland is aware of this issue, which is expected to be resolved shortly. More generally, many of the exchange partners that received a significant number of records from Ireland indicated that they achieved a success rate when matching the information received from Ireland with their taxpayer database that was broadly equivalent to, or better than, what they usually achieve.
Based on these findings it was concluded that Ireland is fully meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. Ireland is encouraged to continue its implementation process accordingly, including by addressing the recommendation made.
Ireland should continue to address the issue raised by its exchange partner.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
In order to collaborate on compliance and enforcement, it appears that Ireland implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. In particular, Ireland received notifications from 11 partners (representing 14% of its partners) and successfully processed most of them in a timely manner, resolving the issues raised, and is taking actions to address the remaining one, including continuing contact with the corresponding partner. This is depicted in Figure 1. It also appears that Ireland will notify its partners effectively of errors or suspected non-compliance it identifies when utilising the information received.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Ireland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
Ireland should continue to work with its exchange partner to address the issue raised.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Ireland’s implementation of the AEOI Standard is on track with respect to exchanging the information effectively in practice, including in relation to sorting, preparing and validating the information (SR 2.4), correctly transmitting the information in a timely manner (SRs 2.5 – 2.8) and providing corrections, amendments or additions to the information (SR 2.9). Ireland is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
Four exchange partners highlighted specific issues with respect to preparation and format of the information sent by Ireland (representing 5% of its partners). These generally related to unknown records, as well as registration and validation errors. More generally, one of Ireland’s exchange partners reported rejecting more than 50% of the files received, due to the technical requirements not being met. This is a relatively low amount when compared to other jurisdictions. It was noted that Ireland has already addressed three of the issues raised and it has implemented a technical solution to address the remaining one and is planning to resend the information to the exchange partner soon.
Based on these findings it was concluded that, overall, Ireland is meeting expectations in relation to sorting, preparing and validating the information. It was also noted that there is room for improvement with respect to sorting, preparing and validating the information before it is sent. Ireland is encouraged to continue its implementation process accordingly, including in relation to the area highlighted.
Ireland should continue to work with its exchange partner to address the issue raised.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Ireland linked to the CTS and the CCN, which is used for exchanges within the EU.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Ireland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
One exchange partner highlighted delays in the sending of information by Ireland. It was noted that Ireland successfully addressed the issue and sent the information as soon as possible thereafter.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to exchanging the information in a timely manner. Ireland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
Feedback from Ireland’s exchange partners did not raise any concerns with respect to Ireland’s use of the agreed transmission methods and therefore with Ireland’s implementation of this requirement.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Ireland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
One exchange partner highlighted delays in the sending of status messages by Ireland. It was noted that Ireland has engaged with its partners and has successfully addressed the issue raised to ensure that status messages are sent in accordance with the requirements.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to the receipt of the information. Ireland is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Ireland appears ready to respond to notifications and to provide corrected, amended or additional information in a timely manner and no such concerns were raised by Ireland’s exchange partners and therefore with respect to Ireland’s implementation of these requirements.
Based on these findings it was concluded that Ireland is fully meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Ireland is encouraged to continue to ensure the ongoing effectiveness of its implementation.