(Limerick East) asked the Minister for Finance if his attention has been drawn to the fact that an assistant secretary at his Department while addressing a seminar organised by Financial Services Industry Association on 17 November 1987 on the attractions of the Customs House Docks site, Dublin 1, as a location for financial services, stated that initially it was envisaged that there should be no transfer at all of existing activities but that it was realised that in the real world an absolute position made no sense; if this signals a change of policy by the Government, and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Customs House Docks Site.
71.
There is no change of policy. As I said in this House on 5 November in response to other questions on the Custom House Docks area, the purpose of the International Financial Services Centre (IFSC) is not to facilitate transfers of activities from elsewhere in Ireland. Nevertheless, transfers into the area may be fully justified where there are plans for significant expansion in the scale of the activities in question in response to the stimulus of the favourable environment of the IFSC. To refuse permission for such transfers would not serve the best interests of the economy since the increased profits and employment thereby arising would compensate for any tax loss on foot of the reduced rate of corporation tax. The Deputy will appreciate that companies, whether starting up new operations in the Custom House Docks area or relocating from abroad or from elsewhere in Ireland, may qualify for the 10 per cent rate of corporation tax on profits derived from international business only.
(Limerick East): The Minister will confirm, I am sure, that he gave a commitment when debating this that the package of incentives would only apply to new business. Now, an Assistant Secretary in his Department is saying that it will also apply to the transfer of existing activities. Will the Minister inform the House if it is correct that the two main banking groups have been given commitments that, on the transfer of existing business, the 10 per cent tax regime will apply provided there is also incremental business?
It will apply only if there is incremental business for any application made.
(Limerick East): It will also apply to existing business which is in breach of the Minister's commitment during the debate.
It is not in breach of any commitment I gave——
(Limerick East): The Minister said it would apply to new business only.
I said it would be on a case by case basis and when the question of new business was raised I said it would apply where incremental business was involved.