IRD Encouraging Voluntary Disclosure as Part of Its Compliance Programme

As part of its on-going compliance programme the IRD is continuing to encourage tax payers to make voluntary disclosures where they have not met their tax obligations.

The advantage to the tax payer of making a voluntary disclosure is that it can greatly reduce the penalties applied by the IRD on any outstanding tax liability; penalties can be reduced by up to 100% in some cases so there can be a real incentive to make a voluntary disclosure.

As another advantage the IRD have also indicated that they may offer some flexibility around payment of outstanding tax for those tax payers who make a voluntary disclosure.

The IRD have warned that their systems around compliance risk profiling are becoming increasingly sophisticated as they seek to identify and reduce tax evasion.

In addition to encouraging voluntary disclosure other areas of IRD focus include “under the counter payments”, the use of inappropriate tax structures to avoid paying tax and non-disclosure of offshore income.

While there is no set procedure for making a voluntary disclosure to the IRD, it is strongly recommended that when a tax payer is making a voluntary disclosure that they consult a tax advisor beforehand. A key reason for this is to ensure that the correct information is presented in the correct format for the correct period.

UHY Haines Norton has expertise on making voluntary disclosures to the IRD and is currently advising a number of clients who are in the process of making such disclosures. Please contact us if you are considering making a voluntary disclosure to the IRD and would like assistance.

2012-08-07T09:00:55+00:00August 7th, 2012|Accounting|