The Determination of Additional Penalty Rules, 2025 have been enacted pursuant to L.N. 177 of 2025. These rules, issued in terms of the DUTY ON DOCUMENTS AND TRANSFERS ACT (DDTA), the INCOME TAX MANAGEMENT ACT (ITMA) and the VALUE ADDED TAX ACT (VATA), establish the manner in which the additional penalty referred to in article 68 of the DDTA, article 52A of the ITMA and article 84A of the VATA is to be determined.
The above-mentioned articles introduced a ‘special mechanism for out of court settlements’ of disputes with the MTCA by way of a special agreement between the taxpayer and the Commissioner for Tax & Customs, involving additional penalties comparable to the amounts which would be payable as fines in criminal proceedings involving financial crime.
The additional penalty shall not be less than €10,000 but not more than €1,000,000 according to a progressive rate as indicated in the LN. The additional penalty shall be paid immediately upon the signing of the agreement or in instalments over a period of time, as may be determined by the Commissioner. Where the amount is to be paid in instalments, the first instalment shall amount to at least 10% of the additional penalty which shall be paid upon the signing of the agreement. The debtor shall be obliged to provide a guarantee to the satisfaction of the Commissioner covering the payment of the amount of the additional penalty which is still outstanding at the time of the agreement.
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The above does not constitute tax or legal advice and is up to date on the date it was published. Please ensure that you take appropriate advice from tax or legal professionals before making any decisions based on the above.
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