There is a little difficulty in that Senator FitzGerald who is Chairman of the Sub-Committee which examined this is detained in the Seanad. I understand that Senator Conroy has been prevailed upon to present the report.
Application to Collective Investment Institutions of Proposed Directive on Harmonisation of Systems of Company Taxation and of Withholding Taxes on Dividends.
I attended, as my first attendance, the Sub-Committee where this proposal was discussed. Basically what is being attempted is to apply to unit trusts the Council's proposed directive on company taxation. This really applies particulary to one Irish unit trust because we do not have a well-developed unit trust market. We are a little worried that the arrangements which are envisaged by the Community could lead to administrative difficulties in this country. Unit trusts run on a minimum expenditure with a minimum degree of administration involved. If an excessive amount of administration is involved in relation to this harmonisation, it could be quite serious for unit trusts here. There is also the question of a withholding tax. I understand this was considered by the previous Joint Committee. Our concern with the matter as it affects unit trusts relates to the inequitable disparity between the effective income received by a unit holder as compared with an ordinary shareholder. The whole point of a unit trust is that it gives the small investor the opportunity to invest in shares and that could perhaps be interfered with. We are concerned about this matter. We considered it very carefully and this was our recommendation, that these points affect in particular the Irish unit trust involved and that these points should be put to the Community. We wish to acknowledge the help we got from First General Unit Managers Ltd. and the Bank of Ireland whom it concerns. There are also some comparable trusts involved in the insurance type of industry in Ireland but they are not affected by the proposal. My apologies, Chairman, for my very inadequate representation of the matters involved.
I think Senator Conroy has done a remarkable job for somebody who had very little contact with the preparation of this report.
Paragraphs 1 to 11, inclusive, agreed to.
Draft Report agreed to.
Ordered: To report accordingly.