The Court of Appeal has ruled that five taxpayers challenging Criminal Assets Bureau assessments must prove their claim that they were not resident in Ireland for the tax years concerned.
The appellants, J.S.S., J.S.J., T.S., D.S. and P.S., appealed a High Court judgment which had upheld a Tax Appeal Commission ruling on the burden of proof. They claim they followed a nomadic lifestyle abroad and were not resident in the State for tax purposes during years covered by income tax assessments and amended assessments issued by CAB.
The dispute before the Court of Appeal did not decide whether they were actually resident in Ireland or whether the underlying tax assessments were ultimately correct. It concerned who must prove residence or non-residence when those assessments are appealed.
The appellants argued that CAB first had to establish they were tax resident before they could be treated as chargeable persons. The court rejected that argument.
Mr Justice McDonald said residence is simply one of several factual matters capable of determining whether a person is liable for tax, alongside issues such as whether a trade was carried on or profits were made. Under the statutory tax appeal system, an assessment stands unless the taxpayer demonstrates that it should be reduced or set aside.
The court held that the taxpayers therefore bear the legal burden of proving, on the balance of probabilities, that they were not resident within the test in section 819 of the Taxes Consolidation Act 1997. That provision looks principally at the number of days an individual was present in the State during relevant tax years.
The judgment added that the evidential burden can shift in an individual case once a taxpayer has produced sufficient evidence supporting non-residence. But the underlying legal burden remains with the taxpayer.
The appeal was dismissed and the High Court and Tax Appeal Commission decisions were affirmed. The court provisionally indicated that CAB should receive its appeal costs, subject to submissions.