Tax Clearance Certificates

Market traders are not required to provide a Tax Clearance Certificate when making an application for a casual trading licence.

It should be noted that a requirement to provide a Tax Clearance Certificate is not included in the casual trading statutory application form S.I. 146/1996. In fact the requirement for a tax clearance certificate was expressly removed from casual trading legislation by the legislature and replaced with a requirement to provide a PPS Number (in the case of an individual), or a tax reference number (in the case of a company) and a Company Registration Number (in the case of a Limited company).

(See The Statutory Casual Trading Application Form, Parts 5 & 6.)

Notifying the Revenue

A local authority is required to notify the Revenue of the name, address and tax reference number of a person who has been granted a casual trading licence. These provisions were created via an amendment to Section 4(2) of the Casual Trading Act 1995 via Section 141 of the Finance Act 1996.

Finance Act 1996

Amendment of Section 4 (Casual Trading Licences) of Casual Trading Act, 1995.

Section 141.—

Section 4 of the Casual Trading Act, 1995 , is hereby amended by the insertion of the following subsection after Subsection (2):

“(2A)(a) For the purposes of the assessment, charge, collection and recovery of any tax or duty placed under the care and management of the Revenue Commissioners—

(i) a casual trading licence shall not be granted unless the application for a casual trading licence contains the applicant’s tax reference number, and

(ii) the local authority concerned shall, upon the grant of a casual trading licence, or as soon as may be thereafter, notify the Revenue Commissioners in writing of the name, address and tax reference number of the person to whom the licence was granted and the conditions (if any) contained in the licence including the duration thereof.

(b) In this subsection, ‘tax reference number’, in relation to an applicant for a casual trading licence, means —

(i) in the case of an applicant who is an individual, the identifying number, known as the Revenue and Social Insurance (RSI) Number, and

(ii) in the case of any other applicant, the identifying or reference number, stated on any correspondence, including a notice of determination of tax-free allowances, return of income or return of profits form or notice of assessment issued to the applicant by an inspector of taxes appointed under section 161 of the Income Tax Act, 1967.”

The purpose of a Tax Clearance Certificate is to ensure that the persons who benefit from a licence to conduct certain activities in the state are in compliance with their tax obligations. This is provided for under section 242(2) of the Finance Act 1992.

Ordinarily it is standard practice for a local authority to request a Tax Clearance Certificate when issuing liquor; bookmaking or road transports licences etc. However this requirement was intentionally removed from the original draft of the 1994 Casual Trading Bill. In fact the whole bill was very nearly abandoned on this issue!

It was realised by the legislature that the original Tax Clearance Certificate requirement would place an unjustifiable and disproportionate burden on casual traders. A local authority would still be able to assess a casual traders tax compliance status through their (RSI) PPS number as all tax system information can be obtained via this number. A casual trader’s (RSI) PPS number was therefore included in the statutory application form. This arrangement was seen as the only workable solution that would fit with the real world of the casual trading community.

The original Casual Trading Bill 1994 did include a provision for Tax Clearance Certificate. . .

Seanad Eireann – Volume 144 – 11 July, 1995

Casual Trading Bill, 1994: Second Stage.

Minister of State at the Department of enterprise and Employment

(Mr. Rabbitte):

“. In section 4 I have deleted the tax clearance provision and replaced it by an administrative system that will ask applicants for licenses to quote their RSI numbers on the application forms. This follows Government approval and acknowledgement that the original tax clearance requirements would present an unjustifiable and disproportionate burden on the casual trading community. I am satisfied that the alternative [768] administrative system that has been accepted by the Casual Trading Association (I.O.M.S.T.) will provide a more equitable approach towards creating a licensing system that sits comfortably with the real world of the casual trading communities.”

“. . . I have to address [806] the situation of people who have plied their trade for generations in Moore Street. I have been asked to explain the reason for the removal of the requirement for a tax clearance certificate. I am afraid that my assiduous and hardworking civil servants couched it in such sophisticated and elegant language that the point was missed. I do not want to give offence to anybody in describing why I took that decision, but the truth of the matter is that the people of Moore Street do not know what a tax clearance certificate is.”

“Senator Dardis put some serious questions to me and he is entitled to answers. Why does he think the Bill was abandoned 17 months ago when it first raised it head? It was abandoned on this issue because it was simply not capable of being implemented. Nor, I suggest, is Senator O’Toole’s half-intended amendment, which he waved in front of me to induce me to tell all. If we were to excise the Dublin metropolitan area [808] that would not work either, because there are parts of that area, other than Moore Street, where, as Senator Ormonde will know, it is urgent that this legislation should be implemented. That is the thinking behind it.”

In the Final Stages of the Bill through the Senate, an amendment was put forward to restore the provision for a Tax Clearance Certificate in section 4 of the Bill.