An initiative in the Republic of Ireland may just have a knock-on effect in Dubai and a string of other countries too – because the tax man is coming to call.
Ireland's revenue commissioners are this week writing to up to 4,000 long-standing property investors demanding to know if money used to pay deposits on commercial and residential schemes around the world has been declared for tax.
It will also offer them the opportunity to make a voluntary disclosure and settlement. Rumours in the Irish press suggest that a 'voluntary' deal after receipt of a letter this week will result in them paying as little as 10 per cent tax on their hitherto undeclared funds. If they do not come clean and are caught out in a subsequent probe, they will have to pay 75 per cent and be placed on a debtors' register.
The Irish authorities have already obtained the names of thousands of Irish citizens holding overseas bank accounts, under a recent European information-sharing protocol called the EU Savings Directive. The likelihood is that similar information will soon find its way to national tax authorities in the United Kingdom and other EU member nations.
A recent study by two wealth research consultancies estimated that Irish investors owned 60,000 foreign commercial and residential properties worth £5.5 billion. Across the rest of Western Europe that figure is thought likely to quadruple at least.
The knock-on for Dubai? Well if tax has to be paid, there may be less money for Irish and other EU investors to spend on foreign property. So everyone suffers – except the tax man, of course.