Ireland Joins Global Effort to Combat Tax Evasion Through Property Ownership Transparency
Ireland has taken a significant step in the global fight against tax evasion by joining forces with 24 other countries under the Organisation for Economic Co-operation and Development (OECD) to enhance transparency in property ownership. This new agreement aims to share and exchange information on foreign property ownership, making it harder for individuals to hide income from rental properties abroad.
The initiative is part of a broader international effort to tackle tax evasion, especially among those who own holiday homes or investment properties in different countries. It is estimated that hundreds of thousands of foreign properties are owned by Irish residents, and these individuals are required to pay taxes in Ireland on any rental income generated from these properties.
This move marks a shift from previous agreements, which were limited to individual countries. The new accord will create a more comprehensive system, ensuring that even those with large international property portfolios are held accountable for their tax obligations. The Irish Revenue Commissioners have stated that they will work closely with other nations to gain better access to information about property ownership and rental income.
Tánaiste and Minister for Finance Simon Harris emphasized the importance of this initiative, stating that Ireland will become an early adopter of a crucial tax transparency project. He noted that this could serve as a foundation for further actions in the future.
According to sources, the plan is designed to target not only criminals but also ordinary citizens who may have avoided declaring rental income from their holiday homes. Security experts have highlighted that many criminals use property investments as a way to launder money, particularly in tourist hotspots like Spain and Portugal. These properties often serve as both holiday homes and investment vehicles, allowing individuals to maintain their lifestyles without being detected.
The Department of Finance has pointed out that recent developments in tax policy have significantly improved cross-border exchanges of tax information. This includes initiatives such as the Common Reporting Standard (CRS) for financial assets and the Crypto-Asset Reporting Framework. However, there is still no mechanism in place for exchanging information on non-financial assets, such as immovable property.
Despite the new measures, some property owners are already finding ways to circumvent the potential tax burden. In Spain, for instance, home swapping has become a popular alternative to traditional holiday rentals. This trend allows people to exchange homes without any monetary transaction, bypassing the formal rental market.
However, this practice is currently operating in a legal vacuum. According to tax lawyer José María Salcedo, the Tax Agency has yet to establish clear guidelines for participants. He explained that while no money changes hands, the swap involves a mutual exchange—staying in someone’s home in return for them staying in yours.
The Tánaiste acknowledged the complexity of cross-border property ownership and transactions. He stated that the initiative aims to recognize the need for improved mechanisms to ensure that tax authorities have access to relevant information on foreign immovable property.
“We welcome the new Multilateral Competent Authority Agreement on Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA) between tax authorities developed by the OECD,” a statement said. “The broad adoption of this initiative is an important step towards delivering tax transparency on non-financial assets.”
The OECD report highlights how historical bank secrecy rules and limited information sharing have made it difficult for tax administrations to track foreign assets and income. However, over the past 15 years, significant progress has been made in reducing barriers to cross-border information exchange.
The multinational crackdown on tax evasion involves a wide range of countries, including Belgium, Brazil, Britain, Chile, Costa Rica, Finland, France, Germany, Greece, Iceland, Italy, Korea, Lithuania, Malta, New Zealand, Norway, Peru, Portugal, Romania, Slovenia, South Africa, Spain, Sweden, and Gibraltar, along with Ireland.
Additional reporting by Garreth MacNamee