Non-Resident Companies

Dáil Éireann Debate, Thursday - 30 May 2013

Thursday, 30 May 2013

Questions (116, 117, 118)

Peadar Tóibín

Question:

116. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the expected impact of the Companies Bill 2012 on the operation of Irish registered non-resident companies. [26379/13]

Peadar Tóibín

Question:

117. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if the Companies Bill 2012 will address the loophole in which an Irish registered non-resident company can claim tax residence in another state yet not declare itself resident for tax purposes in that state. [26380/13]

Peadar Tóibín

Question:

118. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if the Companies Bill 2012 will make company registration a test of residence without exception and, in view of the reputational damage done to this State by the tax avoidance measures of multinationals, if he will now take steps in the Companies Acts to address the abuse of the concept of Irish registered non-resident companies. [26381/13]

Written answers

Minister for Jobs, Enterprise and Innovation

I propose to take Questions Nos. 116 to 118, inclusive, together.

Policy responsibility for tax issues rests with my colleague the Minister for Finance. I have no direct function for such matters.

With regard to company law, measures were taken in response to concerns in the 1990s regarding Irish Registered Non-resident companies. These measures are contained at sections 42-51 of the Companies (Amendment) (No. 2) Act, 1999 as amended.

First, as a precondition of incorporation, every application for registration is required to demonstrate that the proposed company intends to carry on an activity in the State.

Secondly the 1999 Act required that every company registered in the state was required to maintain an Irish resident director or a bond to the value of €25,394.76. The Irish resident director requirement was subsequently changed under the Companies (Amendment) Act 2009 to a requirement for a director resident in the European Economic Area. The requirement for either a bond or an EEA resident director does not apply if the company obtains from the Registrar of Companies a certificate that the company has a real and continuous link with one or more economic activities in the state. The company concerned must provide proof of such a link.

A statement from the Revenue Commissioners that it has reasonable grounds to believe that the company has such a link is deemed proof of a link under the Act. Additionally the number of directorships which could be held by one person was limited to 25 (subject to certain exemptions). Finally the Act contained enhanced strike-off provisions and enhanced notification to the CRO where directors have resigned. The Companies Bill 2012 contains similar provisions to sections 42-51 of the Companies (Amendment) (No. 2) Act, 1999 as amended.