Committee Reports::Report No. 51 - Taxation, Mutual Assistance on, Duties repayment: Customs Debt::23 March, 1977::Report



1. Commission Proposals

The Joint Committee has examined the following proposals which have been made by the Commission to the Council and which come under the aegis of the Revenue Commissioners:—

Proposal for a Council Directive concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (R/937/76);

Proposal for a Council Regulation on the repayment or remission of import or export duties (R/121/76);


Proposal for a Council Directive on the harmonisation of provisions laid down by law, regulation or administrative action relating to customs debt (R/953/76).

On 10th February, 1975 the Council adopted a resolution* in regard to measures to be adopted to combat international tax evasion. The proposed mutual assistance Directive is the first of a series of measures intended to follow up the resolution.

The other two proposals are aimed at securing uniform treatment of importers and exporters throughout the Community while the draft Regulation is also seen as impinging on the arrangements for the Community’s own resources.


2. Contents of Proposal

The proposal envisages the competent authorities in each Member State exchanging information which is in their possession or within their powers to obtain, and which may assist in determining the correct liability to taxes on income or capital. It provides for the giving of this information on a specified request, or spontaneously in certain specified categories of cases where the information itself would suggest the possibility of evasion in another Member State and also for a consultation procedure through which information would be exchanged automatically in particular categories of cases. It also envisages Member States, who wish to do so, authorising the presence on their territories of officials from the tax administration of the other Member State for the purpose of assisting the exchange of information.

The proposal contains rules for the protection of secrecy. In order that sanctions may be exigible for any breach of secrecy the proposal attaches to information received from another Member State the provisions of the relevant domestic legislation of the receiving State. Because of differences in the extent and nature of the secrecy provisions in the various Member States, there is a further provision that where the State required to give information has more stringent secrecy rules than the receiving State, it need not give the information unless the receiving State undertakes to respect those narrower limits and so maintain the degree of confidentiality which was attached to the information in the State of origin. The proposal also lays down that the overall limits to the exchange of information are those which are imposed on each Member State by its domestic law.

3. Views of the Joint Committee

The Joint Committee would have thought that the exchange of information between revenue authorities was, as far as Ireland is concerned, already adequately covered by existing bilateral conventions between Member States. However, it has no objection in principle to the proposed Directive but it would like to see the arrangements envisaged tightened up in the following respects:-

(a) Exchange on request

Domestic legislation authorising any necessary enquiries should not have the effect of also extending the existing powers of enquiry of the Revenue Commissioners for determining national tax liabilities.

(b) Automatic Exchange

The determination of categories of cases in which information may be automatically exchanged is strictly a legislative function and should not be left entirely to the competent authorities in each Member State. The Directive should set the limits within which they should operate.

(c) Spontaneous Exchange

The term “artificial transfer of profits” in the draft Directive should be defined precisely so as to exclude bona fide trading operations. Moreover, the mere fact that a firm in another Member State transfers some of its operations to a new subsidiary in Ireland could be regarded as entailing some loss of tax in that other Member State. This type of case should not be treated as requiring automatic exchange of information.

(d) Double Taxation

The draft Directive should specifically provide that the same profits may not be taxed in two States.

4. Acknowledgement

The Joint Committee wishes to express its appreciation of the assistance it received from the Confederation of Irish Industry and the Irish Bankers Federation in considering this proposal.


5. Contents of Proposal

Repayment or remission of customs duties, levies and such charges arises when, for example, they have been paid in error or when the goods involved are rejected as defective or as not in accordance with the contract. The conditions under which such repayment or remission is made are governed by the national laws of each Member State. Adoption of the proposed Regulation would involve these national laws being replaced by the Community rules set out in the proposal.

6. Views of the Joint Committee

The Joint Committee is satisfied that the adoption of the proposal would have no significant implications for Ireland. It does, however, believe that the periods within which repayment of duty may be claimed, as specified in the draft Regulation, are too short and it would like to see these extended. Under the Customs Consolidation Act, 1876 repayment of customs duty paid in error may be claimed within six years. Under the proposed Regulation the period would be either three or six months depending on the type of error. Repayment of duty paid on goods rejected, damaged in transit or destroyed is now allowed by virtue of section 28 of the Finance Act, 1933 which does not specify any time limit. The draft Regulation would set limits of six or twelve months though these could be extended in exceptional circumstances.


7. Contents of Proposal

Customs debt means the obligation to pay duties, levies and such charges. The precise point at which this obligation arises and on whom the obligation devolves are governed by national rules. The proposed Directive would oblige Member States to amend their laws and practices so that these rules would be uniform throughout the Community.

8. Views of Joint Committee

The Joint Committee is advised that the adoption of the Directive would have no significant implications for Ireland although some amendment of existing accounting procedures might be required. The Joint Committee has no objection to the proposal.


Chairman of the Joint Committee.

23rd March, 1977.

*O.J. C35, 14th February, 1975.