Vol. 524 No. 1
7 Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will make a statement on the progress being made in regard to regularising the position of Irish registered non-resident companies. [21561/00]
The package of taxation and company law measures introduced in 1999 and again this year to address problems arising from the use of Irish registered non-resident companies – IRNRs – for undesirable purposes provide that all companies have to be linked more closely to the State and interface more fully with the Revenue Commissioners and the Registrar of Companies, through compliance with a range of new requirements in company and taxation law.
The key change is in the taxation area as a result of which all companies registered under the Companies Acts are now regarded as being resident in the State for tax purposes, except for companies meeting specific criteria specified in the Finance Act, 1999. The effect of this is that the IRNR structure is no longer generally available.
A feature of the ongoing implementation process is a strong co-operative effort on the part of Revenue and the Registrar of Companies. The registrar has power to strike companies off the register where they fail to supply Revenue with certain information. Following requests from Revenue, the Registrar of Companies is proceeding with the strike-off process against 1,400 companies.
The Minister of State will presumably be familiar with a recent article in The Irish Times which stated that 24,000 companies refused to reply to the Registrar of Companies, which seems a great many, and that this phenomenon still exists. Does he think in his consideration of the problem that new legislation is required? I presume he saw more recently in the newspapers that no less than Marko Milosevic, son of the Yugoslavian despot, has his company headquarters in Baggot Street or somewhere here in Dublin. It would appear that the practice is still taking place. What is the follow-up in a situation where companies do not bother complying with requests from the Registrar of Companies when information is sought?
I seek the Chair's indulgence to place more statistical data on the record. I am absolutely satisfied that the existing legislation pertaining to the Companies Registration Office and the new package of measures introduced in the past two years are having a very positive effect and it is not necessary to introduce new legislation.
An examination of the incorporation of companies over the past three years gives a clear indication that the system is beginning to become very strict and is working well. In 1998, 20,874 companies were incorporated in Ireland; 18,604 in 1999 and 14,638 up until the end of last month. The Revenue Commissioners have written to 68,072 companies and are preparing to write to a further 11,000 seeking certain information for taxation purposes on foot of the new provisions in the Finance Act, 1999. Arising from this exercise, Revenue has, to date, asked the Registrar of Companies to strike off 3,000 companies for failure to supply the information in question. Following discussions with Revenue, particularly in regard to the identification of the companies in question – some may have changed their names and addresses – 2,174 notices of strike-off were issued by the registrar. I am informed that, of these, approximately 770 companies have responded positively to the Revenue Commissioners who are now preparing a formal request to the registrar to proceed with the strike-off process against the remaining 1,404 companies. A further 7,000 are in the Revenue pipeline for strike-off and work is ongoing in regard to identifying other companies for possible strike-off from the balance of the 68,072 companies. In addition to strike-offs arising from this exercise, the registrar has separately pursued a pro-active strike-off policy for some time in respect of companies failing to file their annual returns to the Companies Registration Office. For the period until the end of September 2000, as referred to by Deputy Rabbitte, 23,919 companies were struck off the register as compared with 31,159 in the same period in 1999. These figures include both voluntary and involuntary strike-offs.
The Minister stated that more than 14,600 non-registered companies were incorporated in the first nine months of this year. Is that correct?
No. The figure of 14,638 related to companies incorporated in Ireland, namely companies registered to do business in Ireland. They are not all IRNR companies although some may be.
What impact have the changes in the Finance Act made on the number of IRNRs registered in Ireland? Is it not true that many of these IRNRs are operated to the benefit of individuals involved in fraud and money laundering and should we not ensure that we crack down further on this issue?
The Minister outlined figures for the new system in operation. If he tells me that this abuse cannot happen in the future, I accept that. What about existing Irish registered non-national companies, of which there are estimated to be tens of thousands? What progress will be made in cleaning up the act in this regard? I accept the Minister's point that it will not be possible in the future to operate with similar ease but what about those who have a plate in Dublin or elsewhere in the country?
I thought I made the position quite clear. The Revenue Commissioners have communicated directly with some 68,072 companies.
What does "communicated directly" mean?
It means the Revenue Commissioners have issued a serious document to each of these companies seeking certain information under certain specific criteria for registration in Ireland with regard to taxation etc. and asking them to respond by a particular date. Unless the companies can respond positively to all of the questions by a particular date, the Revenue Commissioners notify the Registrar of Companies to de-register the companies forthwith.
That will happen by what date?
It is happening on an ongoing basis. Approximately 1,000 IRNR companies per week have been struck off since the introduction of these new measures. These strike-offs must be carried out in a legitimate and fair manner. People must receive due notice and due process must be adhered to. Communication is two-way; I stated earlier that of the 3,000 companies which failed to respond to requests from the Revenue Commissioners, 770 subsequently provided the required information and confirmed that they were in order. Those companies received clearance and the remaining 2,174 companies will be struck off the register. We are making tremendous progress and I congratulate the Companies Registration Office on the great work being done.
