Whether the Revenue was justified in refusing to grant parts of records covered by a request for records concerning the tax treatment of intellectual property and trading transactions
5 September 2019
Background
On 4 February 2019, the applicant made an FOI request to the Revenue for all records relating to the following:
- The tax treatment applied or to be applied to the exploitation of intellectual property (IP) and IP rights including patents and patent rights by way of dealing in and/or disposing of those assets. This request expressly excludes all relevant documentation already in the public domain.
- Details of opinions/rulings provided by the Revenue where it has been confirmed that a sale or other disposal of IP rights could be regarded as a trading transaction.
- Details of Revenue opinions/rulings where it has been confirmed that a sale or other disposal of an asset (other than IP) could be regarded as a trading transaction subject to the 12.5% rate of corporation tax on any profit deriving from such sale.
On 21 February 2019, the applicant confirmed that it was seeking such records from 2007 to 2013.
The Revenue’s decision issued from two divisions. Division A’s decision of 7 March 2019 concerned 21 records. It granted partial access to some of these records and relied on sections 35(1)(b) (duty of confidence) and 36(1)(b) (commercially sensitive information) in relation to the remainder. It also referred to another FOI request made by the applicant (Revenue reference number CRMS 367/2019) and said that, further to that request, all internal Revenue documentation relating to a particular audit was exempt under various provisions of the FOI Act. Division B’s decision of 8 March 2019 concerned 16 records. It released one record in full and the rest in part. It relied on sections 35(1)(b), 36(1)(b) and 37(1) (personal information) in relation to the remainder of the records.
On 27 March 2019, the applicant sought an internal review of the Revenue's decision. On 16 April 2019, Division B released further information from one record and otherwise affirmed its decision on the records. Division A’s internal review decision of 18 April 2019 affirmed its decision on all of the records concerned. On 17 June 2019, the applicant made an application to this Office seeking a review of the Revenue's decision on its request.
I have now decided to conclude my review by way of a formal, binding decision. In carrying out my review, I have had regard to the above exchanges and to correspondence between this Office, the Revenue and the applicant. I have had regard also to the provisions of the FOI Act and the records considered by the Revenue.
Scope of Review
This review is confined to whether or not the Revenue's refusal to fully grant the applicant's FOI request is justified under the provisions of the FOI Act.
As noted above, the Revenue’s decision refers to another request made to it by the applicant (Revenue reference number CRMS 367/2019). The Revenue says that the records scheduled in this case are the only records relevant to this request and are not the same records relevant to 367/2019. It says that the decision maker referred to 367/2019 only because he was dealing with multiple requests from the same requester. The applicant accepts that the requests are different and this review will not consider the records the subject of 367/2019.
Findings
In making my decision in this case, I have had regard to certain general matters. Section 18(1) of the FOI Act provides, that "if it is practicable to do so", access to an otherwise exempt record shall be granted by preparing a copy, in such form as the head of the public body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the resulting copy would be misleading (section 18(2) refers). While the Revenue has released details from certain records while redacting other parts, the Commissioner takes the view that, generally, neither the definition of a record nor the provisions of section 18 envisage or require the extraction of particular sentences or occasional paragraphs from the remaining withheld details for the purpose of granting access to those particular sentences or paragraphs.
Furthermore, section 13(4) of the FOI Act provides that, subject to the other provisions of the Act, FOI decision makers must disregard any reasons for the request. Finally, the release of a record under the FOI Act is understood, effectively, to be equivalent to its release to the world at large.
Section 35(1)(b)
In the overall circumstances, section 35(1)(b) seems to me to be the most appropriate exemption to consider. Section 35(1)(b) of the FOI Act requires the refusal of a record where disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment (other than a provision specified in column (3) in Part 1 or 2 of Schedule 3 of an enactment specified in that Schedule) or otherwise by law.
The applicant says that the Revenue has redacted some records excessively and has found others to be totally exempt without proper justification. It refers to the tests for an equitable duty of confidence (i.e. a duty of confidence that is provided for otherwise by law), which it says are the requirements for breaching a duty of confidence. It says that section 35(1)(b) cannot be claimed, particularly in relation to records comprising the Revenue’s internal correspondence. It says that any confidential or secret third party information can be redacted from the records. It refers to ongoing litigation it has taken against the Revenue. It says that there is considerable public interest in those proceedings, including the importance of certainty for taxpayers. It says that it has a material interest in obtaining the records and that disclosure is essential to ensure transparency in the actions of an FOI body and to ensure that all taxpayers get equal treatment.
The Revenue’s decisions say that section 35(1)(b) applies on the basis that the withheld information comprises confidential taxpayer information. It says that section 851A of the Taxes Consolidation Act 1997 (the TCA) requires the Revenue to treat such information as confidential and that it can only be released in the very limited circumstances set out in that provision.
Revenue is claiming that disclosing the records would result in a breach of a duty of confidence provided for by a provision of an enactment, rather than an equitable duty of confidence. Generally speaking, section 851A (1) of the Taxes Consolidation Act 1997 (the TCA) defines taxpayer information as information of any kind and in any form relating to one or more persons that is obtained by a Revenue Officer or for the purposes of the Acts, purportedly for the purposes of the Acts or prepared from information so obtained, but does not include information that does not directly or indirectly reveal the identity of the person to whom it relates. Subsection (2) provides that all taxpayer information held by the Revenue Commissioners or a Revenue Officer is confidential and may only be disclosed in accordance with section 851A or as is otherwise provided for by any other statutory provision.
I have examined the records and am satisfied that they are comprised of taxpayer information and that the Revenue owes the parties to which the records relate a duty of confidence further to section 851A of the TCA. Section 851A of the TCA is not listed in column (3) in Part 1 or 2 of Schedule 3 to the FOI Act. I accept that granting access to the withheld information would constitute a breach of a duty of confidence provided for by an enactment.
It is well established that an action for a breach of confidence is subject to a public interest defence. This Office notes that the public interest grounds which may justify or excuse a breach of a duty of confidence are quite narrow. Such grounds which the Courts have had regard to include the exposure or avoidance of wrongdoing or danger to the public; ensuring the maintenance of the principles of justice; the release of what could generally be described as "government" information; and because information concerns matters of very significant public importance. In my view, there is no basis for setting aside the requirements of section 35(1)(b) in this case. While the applicant has argued that there is a public interest in the legal proceedings, I do not consider that I can make a finding to the effect that the duty of confidence owed in this case by the Revenue to the third parties should be breached in order to disclose confidential taxpayer information to the world at large under FOI on the basis of the applicant’s reasons for seeking the records or its views on the importance of the litigation. I find that the records are exempt under section 35(1)(b) of the FOI Act.
I have noted the provisions of section 35(2) in relation to those records that were created by the Revenue. Section 35(2) provides that subsection (1) shall not apply to a record which is prepared by a head or any other person (being a director or staff member of an FOI body or a service provider) in the course of the performance of his or her functions "unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than an FOI body or head or a director, or member of staff of an FOI body or of such a service provider." I am satisfied that the parties to which the records relate are not service providers within the meaning of the FOI Act. Thus, I find that section 35(2) does not apply in this case.
The Revenue appears to consider certain parts of the records to be exempt under sections 36 and 37 rather than section 35. I do not intend to consider the applications of these provisions given that I am satisfied that the records, in their entirety, relate to the tax affairs of parties other than the applicant. I accept that the Revenue’s decision to grant partial access to such records further to section 18 was clearly in the spirit of the FOI Act. I also note that in so doing, it had regard to that part of section 851A which provides that taxpayer information does not include information that does not directly or indirectly reveal the identity of the person to whom it relates. I note also that the applicant says that third party information could be redacted from the withheld records or parts of records and thus that further excerpts could be released.
It seems to me that the relevant part of section 851A is concerned with references to taxpayer issues in more general records, such as policy related documentation for instance, and is intended to ensure that such papers are not categorised as containing taxpayer information such that they cannot be disclosed or published. While granting partial access to records may be appropriate in the case of a taxpayer seeking access to their own records, I do not consider that the relevant part of section 851A intends to provide for granting partial access to records that as a whole contain third party taxpayer information for the purposes of section 18 of the FOI Act. In addition, while Revenue did not refer to the mandatory exemption at section 41(1)(a) of the FOI Act, it is open to a public body to consider whether that exemption could be applied to a record on the basis that disclosure of the relevant information is prohibited by an enactment.
Decision
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the Revenue’s decision. I find that the records are exempt under section 35(1)(b) of the FOI Act.
Right of Appeal
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Elizabeth Dolan
Senior Investigator