Joan Burton
Question:5 Ms Burton asked the Taoiseach the total amount of profits, dividends and royalties being repatriated by foreign-owned companies in each year for the past five years; and if he will make a statement on the matter. [25793/03]
Ceisteanna – Questions. - Non-Resident Companies.
Under international recommendations, profits attributable to foreign direct investors are represented by the debit figures for the balance of payments component direct investment income on equity. This reflects the entrepreneurial income of direct investment enterprises, which is the profits earned by these enterprises inclusive of net interest and after depreciation and corporate taxes. This income is comprised of two components – distributions to investors, that is dividends paid and branch profit remittances, and reinvested earnings.
The balance of payments statistics published by the CSO include details on the outflows of direct investment income on equity. The relevant figures for the years 1998 to 2002 are shown in table 1 below.
Table 1: Direct Investment Income on Equity Outflows 1998-2002
|
1998 |
1999 |
2000 |
2001 |
2002 |
|
|
€m |
€m |
€m |
€m |
€m |
|
|
Direct Investment Income on Equity |
14,834 |
20,438 |
22,298 |
25,407 |
31,739 |
|
Of which: |
|||||
|
Dividends and Distributed Branch Profits |
10,437 |
11,677 |
11,736 |
15,037 |
15,251 |
|
Reinvested Earnings |
4,397 |
8,762 |
10,562 |
10,370 |
16,488 |
From this table it can be seen that in 1998, direct investment income on equity stood at €14,834 million and rose to €31,739 million. Of this dividends and distributed profits rose from €10,437 million in 1998 to €15,251 in 2002. Reinvested earnings rose from €4,397 million in 1998 to €16,488 million in 2002.
In line with international standards, royalty payments are treated as a service expenditure rather than as an income flow as was formerly the case. These payments along with other service flows are also recorded in the balance of payments statistics. Table 2 below shows the royalty outflows from Ireland for the years 1998 to 2002.
Table 2: Royalty Payments Abroad 1998-2002
|
1998 |
1999 |
2000 |
2001 |
2002 |
|
|
€m |
€m |
€m |
€m |
€m |
|
|
Royalties |
5,466 |
6,807 |
9,051 |
10,578 |
10,991 |
This table shows that in 1998, royalty payments rose from €5,466 million to €10,991 million. These figures cover payments overseas by both foreign-owned enterprises operating in Ireland as well as those made by indigenous enterprises. It is not possible to distinguish the payments made by foreign-owned operations, but it is likely that they cover a very large proportion of the total.
Approximately €43,000 million in total between the dividends, branch profit repatriation and royalties is the total outflow in the economy as per the 2002 statistics. I am sure the Minister of State will appreciate that is a substantial figure. Are these statistics broken down into sectoral areas, such as multinational manufacturing companies, the Financial Services Centre, pharmaceutical and IT companies? In particular, are the figures for royalties broken down for dealers and providers of petroleum products and services, such as the oil companies. Does the Minister of State have statistics on the difference between our recorded GDP and recorded GNP? Is a correlation made for the difference between those two figures as it is high, compared to other jurisdictions? Is that impact taken into consideration? Are there statistics on how many claims have been made by companies based in other jurisdictions, particularly the United States, Germany and the Netherlands, for the repatriation of profits? Does the Minister of State have figures for settlements made by the Revenue Commissioners for such profits repatriated out of this country, which may attract lower tax rates in this country than they do in their home jurisdictions?
The last question might be more appropriate for the Minister for Finance.
The Deputy drew attention to the combined figure of the outflows, the direct investment income on equity and the royalties. It is equally significant to look at the reinvested earnings, which in 1998 amounted to €4.379 billion and this has now increased to €16.488 billion. The figures for merchandise and services are broken down into transport, tourism and travel, communications, insurance, financial services, computer services etc. I will make available to the Deputy the table on balance of payments current account and IIP.