Aoife Quinn in tax dispute with Revenue over payments from Russian companies
Seán Quinn
, is embroiled in a dispute with the Revenue Commissioners over tax payable on money she received from Russian companies owned by her family's business empire.
The Revenue Commissioners has appealed to the High Court a Tax Appeals Commission determination published last year in respect of Ms Quinn's income tax assessment for 2011 and 2012, when she received monies arising from 'bogus' employment contracts signed with three Quinn Group-owned Russian companies – Finansstroy, Red Sector and Logistica.
The High Court heard on Wednesday that Ms Quinn contends these contracts were a cash extraction scheme, primarily used to fund the Quinn family's legal battle with the Irish Bank Resolution Corporation (IBRC).
In the 2010s, Seán Quinn and his children, including Ms Quinn, were involved in proceedings against IRBC, home to the remnants of the Anglo Irish Bank, which collapsed during the economic crash of 2008.
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The proceedings centred on IBRC's attempts to recover billions of euro of debts owed to Anglo Irish Bank by the Quinn family. Following various cases, the litigation was resolved in 2019.
According to court documents, Ms Quinn received almost €540,000 in gross payments from the three Russian companies owned by Quinn Group between 2011 and 2012. The total tax bill issued by the Revenue for the two years came to €301,718.
Last year, the Tax Appeals Commission determined the money received by Ms Quinn from Finansstroy (€351,465.20 gross) should be removed from Revenue's assessment of her income tax returns for 2011 and 2012, after finding the money was incorrectly assessed.
The commissioner's determination was based on Ms Quinn's evidence, and the findings of Russian courts, that the 'employment' relationship between Ms Quinn and Finansstroy 'was wholly bogus and unlawful'.
There is a specific provision in Irish law that allows for taxing of profits or gains obtained unlawfully, but the Revenue did not assess the Finansstoy money under this provision.
The commissioner noted there was no finding of criminality in respect of the employment relationship.
Ms Quinn had appealed to the Tax Appeals Commission following Revenue's assessment of her income tax returns for 2011 and 2012.
Revenue appealed the commissioner's determination to the High Court last year, seeking the court's opinion on several points of law it says arises from the determination.
Opening the case on Wednesday, Aoife Goodman SC, appearing with Kieran Binchy BL appearing for Revenue, submitted to Ms Justice Siobhán Stack that the commissioner erred in finding the income received from Finansstroy could only be assessed under section 58 of the Taxes Consolidation Act 1997. This section allows for taxation of profits or gains where the source of which is unknown, or arises from an unlawful source or activity.
Revenue assessed the Finansstroy money under section 18 of the Taxes Consolidation Act, which allows for taxing of income arising from an employment outside the State.
Ms Goodman also submitted that the commissioner was wrong to conclude that the Revenue was 'aware of the unlawfulness' of the source of the Finansstroy money when it made its income tax assessment.
Bernard Dunleavy SC, appearing with Eoin O'Shea BL for Ms Quinn, will lay out his client's case on Thursday.
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