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Business Briefs Banks may pay millions in back-tax obligations

February 16, 2011

By Staff Reporter

By Harry Keaney

Borrowers who were hard-pressed by their banks in Ireland will smile on reading this one: the banks themselves may have to pay back hundreds of millions of pounds in unpaid taxes.

In the first major settlement with the Revenue Commissioners arising from investigations into Deposit Interest Retention Tax, the Bank of Ireland is to pay back £30.5 million.

But although the banks are coughing up, it does not mean individual account holders are off the hook. Revenue officials have confirmed that when the current audit on banks and other financial institutions in relation to DIRT is completed later this year, they will then start investigating the taxes owed by individual bogus account holders who evaded the DIRT tax.

DIRT is payable on interest earned on deposits but account holders not resident in Ireland are not liable. However, it has emerged that many Irish bank accounts on which DIRT was not being paid were bogus.

Public Accounts Committee Chairman Jim Mitchell said the settlements with the banks are likely to be the "tip of the iceberg."

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Meanwhile, the European Commission, the executive arm of the European Union, has demanded that major Irish financial institutions respond by October to charges of price fixing. The commission says it has evidence that the banks breached EU rules on exchange-rate charges following the introduction of the single currency. Although the new European currency is not yet available in notes and coins, it is already used for many international transactions.

Tax windfall

Apart from the expected windfall in back taxes from the banks, tax revenues were already gushing in during the first six months of this year, giving Ireland a surplus of £3 billion. By year’s end, tax revenues may be £650 million above budget.

The huge tax windfalls have given the government the option of plowing the cash back into the economy through tax cuts and additional spending or cutting the national debt.

IBO news

The Irish Business Organization of New York will welcome its newly appointed board of advisors at a networking party on July 12 at 7 p.m. in the Metropolitan Pavilion Gallery, 125 W. 18th St., between Sixth and Seventh Avenues. The board of advisors includes William Buckley, BP ReproGraphics; Derry Cronin, Specialized Travel Services; Julie Halpin, Geppetto Group; Maura Kelly, WNET Channel 13, and Joseph Murphy, Country bank.

There will be no July meeting in the Shelburne Hotel.

U.S. students in Ireland

Traveling to Ireland is no longer a one-week vacation for young Americans. According to Kerri Donnelly of Council Exchanges, a New York-based provider of short-term work permits for American college students and recent graduates, enrollment for the exchange’s program in Ireland has "doubled over the last five years."

Details on the Council Exchanges Work in Ireland program may be obtained by logging onto www.councilexchanges.org/work.

Dublin conference

EuroFinance Conferences has announced that its ninth annual international cash and treasury management conference will take place Oct. 25-27 at the Royal Dublin Society in Ireland.

This year’s event, in association with the Irish Association of Corporate Treasurers, will include an address from Irish Finance Minister Charlie McCreevy and an initial welcome from Valerie Little, president of the Irish Association of Corporate Treasurers.

The keynote address, by Tom de Swann, from ABN AMRO Bank, will examine the new business reality, given increasing mergers and acquisition activity, globalization and the e-revolution. There will also be a closing address by Bill Dalton, chief executive, HSBC Bank plc.

Major conference topics this year include:

€ the new e-world – new treasury models;

€ how e-payment solutions can be facilitated;

€ treasury structures for the 21st Century and the drive toward centralization;

€ developing regional treasury hubs within a global structure;

€ tapping global capital markets;

€ treasury technology, the evolution of the treasury systems marketplace;

€ Application Service Provider, what does it mean for treasury.

Presentations will be supported by corporate case studies, expert panel groups and roundtable discussions.

EuroFinance was established in 1994 and is headquartered in London. It is the world’s leading independent organizer of cash and treasury management events. More than 5,000 delegates attend EuroFinance events each year from more than 71 countries.

For information, log onto: http://www.eurofinance.co.uk.

New travel option

Irish people traveling on business or vacation can now get direct access to cheaper fares, hotel accommodation and travel services following the official opening of ebookers.ie.

The website is dedicated to selling four core products: airfares, hotel accommodation, car hire and travel insurance.

New Abbey

Ireland’s Abbey Theater is to get a new building at a cost of £50 million. The existing building, in Dublin, opened in 1966. Critics said it had poor acoustics, bad design and a disappointing appearance.

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