Written Answers. - Irish-Registered Non-Resident Companies.

Liz McManus

Question:

85 Ms McManus asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress being made in regard to the regularisation of the position of Irish-registered non-resident companies; the number of such companies still registered here; the number of companies which have been struck off the register; if she has satisfied herself that these companies are not being used for criminal purposes; and if she will make a statement on the matter. [7110/01]

The package of taxation and company law measures introduced in 1999 and 2000 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, in 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. Going forward, therefore, only companies meeting Revenue's criteria can qualify for the IRNR status under the 1999 Finance Act.

In relation to the position of companies in existence prior to the coming into operation of the new measures Revenue have written to approximately 80,000. These are companies which are incorporated in the State but which had not made contact with Revenue for the purposes of registering for tax as required under the new taxation provisions.

Approximately 33,000 of these companies have been struck off the Companies Office register, either voluntarily or on foot of that office's procedures. Close on 1,100 companies have been struck off the register following notification, under the 1999 Finance Act provisions, to the Registrar by Revenue that the companies had failed to furnish Revenue with the required information. A further list of such companies to be notified to the Registrar with a view to striking them off is close to being finalised by Revenue.

Approximately 13,000 companies have registered for tax while 3,000 have given the required information to Revenue but have indicated that they have not commenced trading. The position of the remaining companies remains under consideration by Revenue.

There is no information available in the Companies Office on the number of IRNRs. Essentially, an IRNR is a company which is incorporated in Ireland under Irish company law but which is not deemed to be resident here for tax purposes because it qualifies for the exceptions provided in the 1999 Finance Act. Consequently, Revenue alone determines which companies incorporated under the Companies Acts qualifies for IRNR status under the 1999 Finance Act.
In 2000, 41,217 companies in total were struck off the Registrar in comparison to 37,850 companies struck off in 1999.
While I have seen newspaper reports some weeks ago in relation to alleged illegal activity by IRNRs, my Department has no direct involvement in any of these cases. It was the potential damage, which such activity had that prompted the Government to take the measures that I have already described and which have so far borne the results outlined.
The current legislative measures will continue to be effectively enforced through the ongoing co-operative efforts on the part of Revenue and the Registrar of Companies and the Office of the Director of Corporate Enforcement, when established, to ensure that the IRNR problem is eliminated over time.
Question No. 86 answered with Question No. 52.
Question No. 87 answered with Question No. 53.