The Supreme Court has ruled that Revenue can, in principle, obtain information about Irish-linked accounts formerly held at National Irish Bank’s Isle of Man branch.
The case arose from an application by Revenue officer Paul Walsh under section 908 of the Taxes Consolidation Act 1997. Revenue sought information on account holders with addresses in the State whose Isle of Man deposits exceeded £5,000 or €6,350 at any time, including names, addresses, opening balances, maximum balances and closure dates.
The High Court had previously ordered disclosure of information concerning transfers between National Irish Bank and related banks in Northern Ireland and the Isle of Man. But it refused the more direct request for information about accounts held at the Isle of Man branch, partly because of concerns about customer confidentiality and the legal position there.
Mr Justice Clarke, giving judgment in the Supreme Court, held that National Irish Bank remained a single Irish corporate entity even though it had operated a branch abroad. For the purposes of the tax legislation, it therefore qualified as a financial institution in respect of the Isle of Man branch as well as its Irish branches.
The court also rejected the argument that making the order necessarily involved an improper extra-territorial exercise of Irish law. The order would operate against the Irish bank and require disclosure to Revenue in Ireland.
However, the court recognised the possibility of a genuine conflict with Isle of Man law. Rather than deciding that issue on inadequate evidence, it adopted a staged approach.
The Supreme Court indicated that the disclosure order should ultimately be made but deferred it for 12 weeks. During that period the bank could apply to the Isle of Man courts for a definitive ruling on whether compliance would breach local law.
If such a conflict were established, the case could return to the Supreme Court to decide how Irish tax enforcement interests should be balanced against international judicial comity.