Vol. 500 No. 4
48 Ms McManus asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress made by the interdepartmental group dealing with the problem of Irish registered non-national companies; when legislation will be introduced to improve the supervision and monitoring of these companies; the main provisions of this legislation; and if she will make a statement on the matter. [4148/99]
The Government has approved a package of measures under both company law and taxation law which it considers has the necessary elements to tackle the problems created by certain Irish registered non-resident companies in a comprehensive and focused manner. These measures were announced by the Minister for Finance on Thursday, 11 February last, on the occasion of the publication of the Finance Bill, 1999.
The company law measures, which will be included in a companies amendment Bill to be published shortly, will provide that as a precondition of incorporation, every application for registration will be required to demonstrate that the proposed company intends to carry on an activity in the State. This provision is designed to prevent the use of Irish registered companies for exclusively foreign activities without any connection with the State; every company will be required to either have an Irish resident director or provide a bond to the value of £20,000 as surety in the event of the company failing to comply with certain company law and tax requirements. This will apply to new companies, as a pre-requisite to incorporation, and to existing companies after a transitional period. However, it will be provided that companies can be subsequently exempted from these requirements by the Registrar of Companies following consultation with the Revenue Commissioners; the number of directorships that any one person can hold will be limited to 25 subject to certain exemptions. The aim of this provision is to curb the issue of nominee directors as a means of disguising beneficial ownership or control; and enhanced strike-off provisions will be introduced where companies fail to make the statutory annual return to the Companies Registration Office (CRO) or fail to register with the Revenue Commissioners for tax purposes. There will be enhanced notification to the CRO where directors have resigned, including strike-off provisions where a company appears to have no director. This provision will ensure more up to date information in the CRO in relation to directors.
On the tax side, the Finance Bill will make registration in the State equate with tax residence for all companies except where the company, or a related company, is carrying on a trade in the State and either the company is ultimately controlled by residents of an EU member state or a tax treaty country, or the company or the related company is quoted on a recognised stock exchange. This will apply to new companies incorporated on or after the date of publication of the Bill and for existing companies from 1 October 1999. For those companies referred to in the exception above, tax residence will continue to be based on where the company is managed and controlled.
