Not that developers can expect any great outpouring of sympathy but in recent days there have been suggestions (for example here and here) that NAMA is actively sharing information with the Revenue Commissioners to “identify any tax implications arising”, according to Neil Callanan at the Sunday Tribune.
It should be remembered that NAMA is effectively a bank and when granting approval to the NAMA scheme, the European Commission was careful to consider NAMA’s position with respect to other banks to ensure there was no distortion of competition. The EC specifically considered a proposal originally made for the NAMA project, that NAMA would be able to access records from the Revenue Commissioners on developers. NAMA’s powers in this area were set out under section 204 (3) of the NAMA Act:
“Notwithstanding any other enactment, the Revenue Commissioners shall disclose to NAMA information in relation to a named relevant person that, in the opinion of the Revenue Commissioners or of NAMA, is required by NAMA for the purposes of the performance of its functions under this Act, and that is in the possession of the Revenue Commissioners, or of which the Revenue Commissioners have knowledge.”
The Commission acknowledged the undertaking given by “the Irish authorities” that this provision of the NAMA Act would not be used. The Commission had nothing to say on the preceding sub-section of the NAMA Act, section 204 (2):
“Notwithstanding any provision of this Act or any other enactment—
(a) the Revenue Commissioners may, for the purposes of the performance of their functions under Part 42 of the Taxes Consolidation Act 1997 and any regulations made under that Part, seek from NAMA information in the possession of NAMA, or which NAMA has knowledge of, in relation to a named relevant person, and
(b) where NAMA is in possession of, or has knowledge of, the information referred to in paragraph (a), NAMA shall provide it to the Revenue Commissioners.”
You would now have to ask if NAMA is engineering a subversion of s 204(3). The Sunday Tribune refer to the significant fact that NAMA’s chairman is former chairman of the Revenue Commissioners, Frank Daly and a casual observer might infer that there was a two-way exchange between the Revenue Commissioners and NAMA which effectively gives NAMA the ability to question a developer’s business plan by reference to tax records through the effective use of the Revenue Commissioners to investigate the contents of the developer’s business plan .
It would however be difficult to defend a developer in such circumstances – after all if the developer has not been honest in disclosing assets then most people would expect the most draconian investigations and penalties. However it seems that NAMA is stealing an advantage over non-NAMA banks operating in the State. Will the Revenue Commissioners actively engage with National Irish Bank, Ulster Bank, KBC, ACC or Rabobank and others with a view to assisting those banks maximise recovery of debts?