Intervention Levels

The New Code includes three intervention “levels” for Revenue to deal with potential non-compliance by taxpayers. The New Code makes clear that these levels are not to be considered as a sequence of actions. This means that Revenue may initiate an intervention at any level of the framework without any prior intervention at a lower level, although an intervention at a lower level may lead to a higher level intervention.

All compliance intervention notifications issued from 1 May 2022 will include a reference to their categorisation as Level 1, Level 2 or Level 3 compliance interventions.

  Level 1 Level 2 Level 3
Goal To support compliance To challenge non-compliance To tackle high-risk cases and practices where Revenue has reason to believe that there has been serious tax/duty evasion or fraud on the part of a taxpayer
  • Self-reviews
  • Profile interviews
  • Bulk issue non-filer reminders
  • Engagements falling under the Co-Operative Compliance Framework (the “CCF”)
  • Risk review
  • Revenue audits.

While formal notification is usually given, an Investigation may be on-going where:

(a)  matters have become known through Revenue’s own investigations, or through investigations conducted by a statutory body / agency;

(b) matters within the scope of the enquiry are being carried out wholly / partly in public; or

(c)  matters are linked to a person with a public link.

Disclosure Opportunities An unprompted qualifying disclosure may be made. A unprompted qualifying disclosure can no longer be made but:

  • Within 28 days a qualifying prompted voluntary disclosure can be made; or
  • Within 21 days a notice of intention to make a prompted  voluntary disclosure can be made.
There is no opportunity to make a qualifying disclosure where an investigation has commenced.


Risk Review

The New Code introduces an intervention called a risk review.  A risk review is a focused intervention to examine a risk or a small number of risks. These reviews will largely be desk-based, but scope is also available for a reviewer to visit the taxpayer’s premises or hold a meeting by video conference where the situation requires. Such on-premises visits require the taxpayer to attend. The taxpayer may also invite a tax agent to attend. The taxpayer will have 28 days to provide the information sought by Revenue.

While the risk review activity appears similar to an aspect query which forms part of the compliance interventions under the Current Code, it is in fact more akin to an audit. This means that once a risk review has been initiated, a taxpayer loses their opportunity to make an unprompted disclosure and any qualifying prompted voluntary disclosure must either be made within 28 days of the notification of a risk review or a notice of intention to make this disclosure must be made within 21 days (see further details below). A qualifying disclosure reduces penalties and avoids publication of a taxpayer’s name on Revenue’s public Tax Defaulters List.

Once the risk review has commenced, additional information may come to light which requires the widening of the scope of the review to other tax heads and / or periods. Here, a risk review may be escalated to a full audit. Where that involves the widening of the scope of the intervention to other tax heads and periods, the taxpayer will receive 28 days’ notice to make a prompted disclosure with respect to any new tax heads/periods covered by the audit notice.

It is important to note that any activities conducted though Revenue’s CCF are classified as Level 1 interventions within the Compliance Intervention Framework.


Impact on Qualifying Disclosures and Time Limits

A qualifying disclosure is information given to Revenue informing them that all taxes due have not been reported or that there is some other error made on a tax return. These disclosures may be unprompted or prompted.  Making a qualifying disclosure can reduce the penalty ultimately paid to Revenue, with the amount of a reduction in penalty varying depending on the nature of the disclosure (prompted or unprompted), the category of the behaviour and consequences (careless versus deliberate, and with or without significant consequences), and how cooperative the taxpayer was throughout the intervention (see Appendix for details).  A qualifying disclosure also prevents publication of a taxpayer’s name on Revenue’s public Tax Defaulters List in respect of the relevant issue.

Under the Current Code, an unprompted disclosure can be made at any time before a Revenue audit notification is issued, with a prompted disclosure possible between the date a taxpayer is informed of an audit start date and the actual date the audit starts. Under the New Code, an unprompted disclosure can no longer be made if a risk review notification has been received, even if an audit is not being initiated.  In addition, once a risk review has been initiated, there is only a short window to decide if a prompted qualifying disclosure will be made.

If made, a qualifying disclosure must cover not only the issue which is the subject of the risk review, but also:

  • In the case of careless behaviour: all liabilities to tax and interest in respect of the relevant tax head and tax period covered by the risk review; and
  • In the case of deliberate default: all liabilities to tax and interest in respect of all taxes and periods.

It will be important that any person who receives notifications from Revenue on a taxpayers’ behalf (both internally or external service providers) is aware of the importance of receipt of a Level 2 compliance intervention (i.e. a risk review or an audit).  This is because a taxpayer in receipt of notice of a Level 2 compliance intervention needs to act quickly to carry out

  • a full review of the tax head for the period in the case of a risk review notification where a taxpayer may have acted carelessly in respect of tax compliance matters; or
  • a full review of all the tax affairs of the company in the case of an audit notification or a risk review where deliberate behaviour may have been involved.

Where a taxpayer does wish to make a qualifying prompted voluntary disclosure, this must be submitted within 28 days of the notification letter. Alternatively there is a 21 day time limit (increased from 14 days under the Current Code, which applied only to audit notifications) by which a taxpayer must submit a notice of intention to make a voluntary disclosure. In this case the taxpayer must provide the disclosure within 60 days. While the notice itself is not a time-consuming process, significant consideration must be given to whether a voluntary disclosure should be made.

Consideration should also be given by any taxpayer who has received a Level 1 compliance intervention notice to undertaking a review of its overall tax compliance position and any risks to which it may be exposed should the Intervention escalate into a Level 2 compliance intervention as at that stage the taxpayer will have lost its ability to make an unprompted voluntary disclosure.


Self-Correction in Writing

Provided a Level 2 or Level 3 compliance intervention has not been initiated, under the new Code a taxpayer can continue to notify Revenue of innocent errors, technical adjustments, and other minor self-initiated corrections within various time limits (generally within 12 months of the filing due date for self-corrections, although this can vary based on the specific return).

The new Code specifies that a submission of an amended return on ROS does not qualify as ‘written’ for notice purposes. Separate notice is required in addition to the amended return being submitted, whether that notice be in writing or submitted through ROS.

Penalties will not be charged for technical adjustments, innocent errors and cases where total tax defaults are less than €6,000 and are in the careless rather than deliberate behaviour category of default.  This is the case under the Current Code as a matter of Revenue practice and Finance Act 2021 put this on a statutory footing.


Helpful Changes to Publication Provisions

Revenue may publish the name (including a trading name or previous name), address and occupation of a person who (i) had a fine or penalty imposed by a Court in respect of tax or duty matters during the relevant quarter, or (ii) agreed a settlement with Revenue under which Revenue agreed to refrain from initiating procedures for recovery.

Under the Current Code, a taxpayer subject to a settlement with Revenue would be excluded from publication where the settlement (including the tax, interest, and penalties) did not exceed €35,000. The New Code reflects amendments introduced by Finance Act 2021, excluding from publication those with a settlement of up to €50,000. This figure accounts for the tax only and does not include the interest and penalties due. Further, where any part of a settlement is not subject to a penalty that part will not be published.

Other cases which continue to be excluded from publication under the New Code are:

  • Cases where a qualifying disclosure is accepted;
  • Cases where the penalty does not exceed 15% of the amount of the additional tax due; and
  • Cases where a “qualifying avoidance disclosure” is accepted and / or a tax avoidance surcharge occurs.


Our Perspective

The policy of encouraging taxpayers to make unprompted qualifying disclosures is to collect taxes with the minimum use of Revenue resources by incentivising taxpayers to regularise their affairs.  Whilst penalties are significantly reduced, the 8% / 10% interest rate far exceeds the rate at which the Irish State can borrow.  Accordingly, it is effectively a penalty but is not mitigated by the Current Code or the New Code. It is disappointing that the policy is less accommodating for taxpayers.  This is not to argue solely from a taxpayer position, but to acknowledge that in cases where there is an unclear technical or factual position, there may be more incentive to litigate.  Despite our vested interest in an increase in litigation, this is not the correct policy outcome.


What Should Taxpayers Do Next?

Taxpayers should be assessing areas of their business where a self-review may be needed, thereby allowing for a Level 1 disclosure opportunity to minimise any potential exposure. Analysis of tax reporting processes should be carried out to ensure timely identification and escalation of Level 2 compliance interventions.  This will be particularly important for taxpayers who engage external tax compliance providers.  Under the New Code, taxpayers will benefit from taking action quicker, and coherent internal systems and processes will be of benefit to taxpayers in identifying potential issues and escalating them in a timely fashion.

Our Tax group has a wealth of experience working with taxpayers across all levels of compliance interventions from Revenue.  If you would like to discuss what services we can offer in this area or if you receive a compliance intervention notification and would like our advice on what to do next, please contact us.




Disclosures Category of Behaviour Penalty %

Full cooperation not given by taxpayer

Penalty %

Prompted Qualifying Disclosure and full cooperation

Penalty %

Unpromoted Qualifying Disclosure and full cooperation

All qualifying disclosures in this category Careless behaviour without significant consequences 20% 10% 3%
First qualifying disclosure in these categories Careless behaviour with significant consequences 40% 20% 5%
Deliberate behaviour 100% 50% 10%
Second qualifying disclosure in these categories Careless behaviour with significant consequences 40% 30% 20%
Deliberate behaviour 100% 75% 55%
Third or subsequent qualifying disclosure in these categories (no reduction in penalty available) Careless behaviour with significant consequences 40% 40% 40%
Deliberate behaviour 100% 100% 100%