Dáil Éireann Debate, Tuesday - 27 January 2026
399. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance to publish the legal or actuarial analysis that informed Revenue’s decision to confine the Karshan Disclosure Opportunity for the years 2024–2025; whether this limitation was approved by his Department’s legal advisers or the Attorney General; and if he will make a statement on the matter. [6570/26]
View answer400. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance if the Karshan Disclosure Opportunity or any associated settlement arrangement has been notified to the European Commission under Article 108(3) TFEU; if not, to explain the basis on which Revenue considers the scheme outside the scope of EU State-aid rules; and if he will make a statement on the matter. [6571/26]
View answer401. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance to list all organisations consulted in the design of the Karshan Disclosure Opportunity, distinguishing between employer, professional-services and worker or trade-union bodies; and if he will make a statement on the matter. [6572/26]
View answer404. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance whether the Attorney General, the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, or any Court has reviewed the compatibility of the Karshan Disclosure Opportunity with the Supreme Court judgment in Revenue v Karshan (Midlands) Ltd [2023] IESC 24; and if he will make a statement on the matter. [6575/26]
View answerI propose to take Questions Nos. 399, 400, 401 and 404 together.
I note the Deputy's questions regarding the Karshan disclosure initiative.
The principle of the independence of the Revenue Commissioners in their dealings with the tax affairs of any individuals, business or other entity under tax and customs legislation is seen as critical to maintaining the integrity of the taxation system. Legal effect in this matter is provided under Section 101 of the Ministers and Secretaries (Amendment) Act, 2011. This provision ensures that neither article 9 of the Revenue Commissioners Order 1923 nor section 9(3) of the Ministers and Secretaries Act 1924, which relate to Ministerial responsibilities and controls, can apply to the Revenue Commissioners when performing their functions under tax and customs legislation. The Attorney General is the legal advisor to the Government. As such, I am advised by Revenue that it does not seek legal advice from the Attorney General in relation to the administration of the taxes and duties under the care and management of Revenue, including the Karshan disclosure initiative. Revenue has, over many decades overseen a number of disclosure opportunities in relation to various matters with a view to encouraging taxpayers to become compliant.
Second, Revenue has informed me that the Karshan disclosure initiative was not required to be notified under Article 108(3) of the Treaty on the Functions of the European Union (TFEU) to the European Commission because there is no State Aid involved.
For State Aid to exist, each of the conditions set out in Article 107(1) of TFEU must be met. A broad outline of these conditions provides that for State Aid to exist, the aid has to be granted through State resources, the aid has to distort or threaten to distort competition, the aid has to be selective (favouring certain businesses over others), and the aid has to affect trade between Member States. The Karshan disclosure initiative does not meet these conditions and, therefore, State aid does not exist, but in particular, because the disclosure initiative is not selective, as it is available to all employers in the State.
Following the Supreme Court judgement in October 2023, Revenue encouraged businesses to review their workforce model in light of the five-step framework outlined in the judgement, and to regularise their tax position.
Revenue recognised that prior to the judgment in October 2023, some employers, acting in good faith, may have misclassified employees for tax purposes as persons engaged in contracts for services. It is in this context, in September 2025, Revenue announced a disclosure initiative aimed at employers who are potentially impacted by the Supreme Court judgment. This initiative incentivises such employers to make a disclosure in respect of 2024 and 2025, the years following the Supreme Court judgement, arising from bona-fide classification errors.
In advance of launching this disclosure initiative, Revenue shared its plans with colleagues in my Department, the Department of Social Welfare (DSP) and the Workplace Relations Commission (WRC). You will note that DSP and the WRC have responsibility for employment status under their own legislative frameworks. In addition, Revenue shared the disclosure regime document via the Tax Administration Liaison Committee (TALC) Audit with the professional tax advisor, accounting and legal bodies who are members of TALC.
The Karshan disclosure initiative is available to all employers in the State and across all sectors, provided that they meet the terms as outlined in the disclosure initiative. Detailed guidance on this disclosure initiative is set out in Tax and Duty Manual ‘Settlement arrangement arising from Revenue v Karshan (Midlands) Ltd. trading as Domino’s Pizza’ which is available at www.revenue.ie/en/tax-professionals/tdm/compliance/audit-and-other-compliance-interventions/karshan-settlement-guidance/karshan-disclosure-opportunity-guidance.pdf.
