2021 net exchequer receipts came to €67.5bn, an increase of 20% (€11.3bn) from 2020. This increase in receipts was primarily driven by increases in income tax and corporation tax receipts.
Total yield from audit and compliance interventions in 2021 was €1.388bn, an increase of almost 200% compared to 2020 but this figure should be skewed by certain large cases settled during the year.
Tax settlements amounting to over €30m were agreed in respect of 86 taxpayers.
Transfer Pricing MAP increased with 80 at the start of 2021 and 86 at the end, 23 initiated and 17 completed. 148 non-transfer pricing MAP cases were initiated in the year, and 155 were completed. 13 APAs were completed.
97 Relevant Tax Opinions were provided by the Revenue Technical Service in 2021, relating to a wide variety of topics including stamp duty (31 opinions), withholding tax (26), reconstructions and amalgamations (18), corporation tax (7) and trading (1).
By 31 December 2021, €2.9bn of tax debt had been warehoused for over 98,000 businesses with €479m in COVID-19 support scheme payments.
Tax receipts for the Irish Exchequer rose considerably during 2021. €96.6bn in gross receipts and net exchequer receipts of €67.5bn were collected in 2021, up 20% on 2020 receipts. Net corporation tax receipts significantly increased from €11.8bn in 2020 to €15.3bn, and net income tax receipts also increased from €22.6bn to €26.7bn.
€8bn in Covid supports were granted to affected businesses and employees, including €4.61bn claimed under the Employment Wage Subsidy Scheme by approximately 47,000 employers in respect of 628,000 employees, €2.9bn in warehoused tax debt (as at 31 December 2021) for 98,000 businesses, and €479m in respect of the Covid Restrictions Support Scheme paid to 21,400 businesses.
Around 463,000 audit and compliance interventions were carried out in 2021, a decrease of 22% on the number of interventions carried out in 2020. Despite this decrease, there was nonetheless a significant growth in the tax yield generated by these interventions, with a tax yield of €1.388bn in 2021, compared to €487.4m in 2020. This yield figure is made up of €388.1m from audits and investigations and €999.8m in non-audit investigations. We note however that the large increase in tax take from audits and investigations in 2021 should be skewed by a number of significant settlements that Revenue agreed over the course of the year.
Transfer Pricing MAP, APA and Exchange of Information
The report notes Irish Revenue's continued engagement in international tax matters, noting specifically the number of information exchange requests, Mutual Agreement Procedures (MAP) and Advance Pricing Agreement (APA) processes with other Competent Authorities.
Concerning information requests, it remains the case that the requests made by foreign tax authorities is considerably greater than the requests made by the Irish Revenue. Most requests received by Irish Revenue come from other EU Member State tax authorities. 959 such requests were received in 2021, compared with 247 requests from other non-EU countries.
DAC 6 reporting began on 1 January 2021, and the first exchange of information by Ireland took place by 30 April 2021. 1,735 returns were made, 1,605 of which were exchanged in quarter one. Most of the returns exchanged in quarter one were in respect of a look-back period which applied to cross-border arrangements implemented between 25 June 2018 and 30 June 2020.
Transfer Pricing MAP disputes increased with 80 at the start of 2021 and 86 at the end of the year. During 2021, 23 such cases were initiated and 17 were completed. Non-transfer pricing cases remained the main type of case addressed through MAP. 148 such cases were initiated in 2021 with 155 completed in the year.
Three APA requests were completed in 2021 following negotiations with other Competent Authorities and 11 new requests were received. The year began with 45 APA cases open, and closed with 52. The rate of progress is explained by the note in the report that negotiation of APAs requires comprehensive analysis and extensive discussions with treaty partners to reach agreement.
Revenue noted the transposition of the DAC7 Directive in the Finance Act 2021, which will require digital platform operators to report income earned by sellers engaged in the sharing and gig economy. Revenue expects to begin receiving reports from such operators in January 2024. During the year Revenue worked closely with the OECD on proposals to develop new and enhanced automatic information exchange initiatives to advance tax transparency for crypto-assets and digital money products.
The report notes involved engagement by Irish Revenue at OECD and EU level in relation to international tax developments, including OECD Pillars 1 and 2 and the EU Council Code of Conduct.
The downward trend in Irish Revenue opinions issuing continues. In 2021 there was a substantial decrease in the number of opinions/confirmations provided through the Revenue Technical Service (RTS). RTS provided 97 Relevant Tax Opinions on complex technical issues to taxpayers, which was a decrease from the 147 such technical opinions issued in 2020.
These opinions touched on issues including stamp duty (31 opinions), withholding tax (26), reconstructions and amalgamations (18), corporation tax (7) and trading (1). The report notes a reminder which was issued in November 2020 which concerned the maximum period of five year validity in respect of such opinions. Taxpayers wishing to continue to rely on such opinions, in respect of a transaction, period or part of a period, on or after 1 January 2021 were required to make an application for their renewal or extension on or before 31 March 2021. Only two such applications were received.
The report noted that Irish Revenue processed 27m import declarations in respect of imported goods in 2021 compared to just over 1m processed in 2020. The total number of customs declarations processed by Revenue in 2021 was almost 30m. This exponential increase was attributed to the withdrawal of the UK from the EU, the removal in July 2021 of the VAT exemption for goods imported into the EU with a value of €22 or less, and a significant increase in online shopping over the course of the Covid-19 pandemic. Revenue stated that businesses had made enormous progress in adapting to the new challenges and uncertainty that arose in 2021.