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Non-Resident Companies

Dáil Éireann Debate, Tuesday - 28 May 2013

Tuesday, 28 May 2013

Questions (174, 175, 176, 190)

Pearse Doherty

Question:

174. Deputy Pearse Doherty asked the Minister for Finance the number of companies and the names of same, that are incorporated here but are considered non-resident for tax purposes. [25521/13]

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Pearse Doherty

Question:

175. Deputy Pearse Doherty asked the Minister for Finance if Revenue has ever conducted a report on companies that are incorporated as Irish but are non-resident for tax purposes; if he has ever commissioned the Revenue to conduct a report or if he will do so in the future. [25522/13]

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Pearse Doherty

Question:

176. Deputy Pearse Doherty asked the Minister for Finance the specific piece of legislation and the provision therein which allow companies to establish themselves as incorporated Irish but non-resident; the conditions attached to such incorporation; the date on which the legislation was introduced and put onto the Statute books; and if the decision to allow such a legal concept emanated from his Department or if it was proposed by advisors and or lobbyists. [25523/13]

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Pearse Doherty

Question:

190. Deputy Pearse Doherty asked the Minister for Finance the number of jobs created here by Irish incorporated, non-resident tax companies, directly and indirectly. [25596/13]

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Written answers

I propose to take Questions Nos. 174 to 176, inclusive, and 190 together.

As a general rule, based on long-standing case law, companies are resident in Ireland for tax purposes if they are managed and controlled here. Since 1999, section 23A of the Taxes Consolidation Act 1997 added rules which provide that certain companies incorporated in the State are to be regarded as being resident in the State for tax purposes. These provisions were introduced into the Taxes Consolidation Act, by section 82 of the Finance Act 1999 which was enacted on 25 March 1999. They were part of a package of measures considered necessary to deal with the issue of Irish registered companies which, while registered in Ireland, had no contact or association with the State following their registration. There was concern that some of these companies were engaged in fraud, money laundering, drug trafficking and other illegal activities. As these companies were managed and controlled outside the State, they were not resident in Ireland for tax purposes under the long-standing management and control rule.

Consistent with the purpose of the provisions - to address companies that were not managed and controlled in the State and had no real connection with the State apart from having been incorporated here - the 1999 additions to the residence rules provided that only Irish-incorporated companies with no other connection with the State were to be regarded as resident in the State by virtue of their incorporation here. A company incorporated in the State is not regarded as tax-resident here where:

- either the company or a related company is carrying on a trade in the State and either

- the company is ultimately controlled in a tax treaty country or in an EU Member State or

- the company or a related company is quoted on a recognised stock exchange in the EU or in a tax treaty country, or

- the company is treated under a tax treaty as not resident in the State.

While tax law is reviewed from time to time from a policy perspective, I have not commissioned the Revenue Commissioners to conduct a report on companies that are incorporated as Irish but non-resident for tax purposes. I am informed by the Commissioners that they have considered such companies in the course of monitoring the arrangements of large cases. I am advised by the Revenue Commissioners that the number of companies and the names of same that are incorporated here but non-resident for tax purposes - and numbers of any related jobs - are not available as they are not separately compiled. My Department is currently working with the Revenue Commissioners to examine further the issues that have recently arisen in relation to this issue.

Question No. 177 answered with Question No. 146.
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