The latest tax-avoidance measure by the EU was the publication last week of the draft directive which would require member-states to impose a 20 per cent holding tax on bank deposits. Alternatively, it requires the tax authorities to provide information about their citizens' accounts.

Revelations about how National Irish Bank facilitated its customers with non-resident accounts to transfer their money to an offshore life assurance scheme linked to the bank in order to avoid paying tax in Ireland, is not an issue exclusive to these shores. Other countries, especially Germany and Denmark, have similar problems with their citizens sending funds to jurisdictions where non-resident accounts are untaxed (such as Luxembourg but also to Britain and Ireland) and the Germans in particular are strong supporters of the directive.

If the directive is passed by the EU members an elaborate double taxation arrangement will have to be put in place first there may be fewer obvious places to hide untaxed funds discreetly, but it will not close off the options available for untaxed funds. Switzerland, the Cayman Islands and other tax havens do not ask very many questions about the origins of deposits and tax is not a pressing issue.

There are very few advantages, except for avoiding tax and the interest of Revenue officials, for an Irish person to open an offshore deposit account, say financial advisers.

Interest rates in Britain or the Isle of Man, where even the Irish banks and building societies have their offshore branches are moderately higher than here about 88.5 per cent gross, but returns are taxable at the highest rate of income tax 46 per cent, if they are reported, of course. "Except for exceptional cases, where someone is based in another country part-time for business reasons, has to travel there regularly, or has an asset like a holiday home that needs managing, the only reason someone would open an offshore account is to a void paying tax," one financial adviser conceded.

Legitimate holders would have no objections to a DIRT tax or their account being revealed to Irish tax authorities, he says.

"If you could get a 12 per cent gross return, then maybe opening such an account would make sense, even after you pay 46 per cent tax, but otherwise, no." Will charging a 20 per cent DIRT rate make any difference to people who are hiding their money already? Probably not, especially if they aren't automatically reported to their own Revenue authorities.

A compulsory DIRT rate will probably discourage new, illegitimate offshore accounts being opened in Britain by ordinary people with small sums, but it isn't likely to have a great effect on wealthy people with hot money.

"Anyone who still has such an account has either opened it since the last tax amnesty, or decided not to take advantage of the amnesty and that money is very hot," we were told.

They'll just move it out of the EU jurisdiction to Switzerland, the Caymans and various other non-EU tax havens. Financial advisers, such as bankers, brokers and consultants, are reluctant to speak on the record about this contentious issue: a few rotten apples have given ordinary people the impression that they have helped, or can help clients hide hot money. "The reporting requirements for financial advisers are very strict: we are obliged by law to pass on the names of any clients for whom we open an overseas account to the Revenue. There are serious consequences if we do not," one adviser insists.

Anyone who wishes to put money offshore could do so for two very good and perfectly legitimate reasons: international fund expertise and because many of these funds are exempt from internal taxation, allowing contributions and profits to roll-over until maturity when only Capital Gains Tax is liable.

The CGT is currently 40 per cent, but there are many industry practitioners, here and offshore who clearly believe the 40 per cent CGT rate violates European competition rules and should be 20 per cent, as it is for Irish-based capital gains.