Dáil Éireann Debate, Wednesday - 15 July 2015
91. Deputy Pearse Doherty asked the Minister for Finance the total amount refunded through the dividend withholding tax refund scheme, the real estate investment trust scheme, or on behalf of the certain non-resident person for refund of dividend withholding tax scheme. [29507/15]
View answer92. Deputy Pearse Doherty asked the Minister for Finance the total amount of income from the real estate investment trust scheme which was not taxed at investor level. [29508/15]
View answer93. Deputy Pearse Doherty asked the Minister for Finance the total value of property held under the real estate investment trust scheme. [29509/15]
View answerI propose to take Questions Nos. 91 to 93, inclusive, together.
I am informed by Revenue that there are currently four Real Estate Investment Trusts ("REITs") established and operating in Ireland.
The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply to property investment via a corporate vehicle. As such, the estimated cost attached to REITs relates not to an exemption from tax, but rather to the move from direct taxation of rental income in the hands of investors, to the taxation of dividends distributed to investors from REIT profits arising from that rental income. The REIT legislation requires that a minimum of 85% of all property income profits be distributed annually to shareholders.
In answer to the question about the amounts of Dividend Withholding Tax ("DWT") refunded, I am assuming the "amount refunded through the Dividend Withholding Tax Refund Scheme" in context of the question refers to non-resident investors only. In general, distributions (payments) made to non-resident investors by Irish companies are exempt from DWT, where a relevant exemption certificate (proof of non-residency) is supplied by the investor to the company. In cases where the proof of non-residency cannot be provided, the company will deduct DWT. I am informed by the Revenue Commissioners that the total amount of DWT that has subsequently been refunded in accordance with the relevant Double Taxation Agreements ("DTAs") in 2015 is not readily available. The general exemption for payments to non-resident investors does not apply to payments made by REITs to non-resident investors. However, non-resident investors who are resident in countries with which Ireland has a DTA may be able to reclaim some of the DWT. Claims for such refunds must be made on a specific form and I am informed by the Revenue Commissioners that the total amount of DWT (which was deducted by REITs on payments to non-resident investors) that has subsequently been refunded in accordance with the relevant DTAs to such investors is €17,083.86.
In answer to the question as to the total amount of REIT income which was not taxed at investor level, the relevant legislation provides that a REIT must return to Revenue details of distributions made where DWT is deducted. As mentioned above, unlike the general rules for distributions paid to non-resident investors, distributions by REITs to such investors are subject to DWT and the non-resident investor will, depending on the national Income Tax rules in his or her country of residence, be subject to tax in that country. Non-resident investors who are resident in countries with which Ireland has a DTA may be able to reclaim some of the DWT, if the relevant DTA permits. Distributions made to Irish resident investors are subject to DWT, deducted by the REIT, in the normal way. Such distributions are subject to Income Tax, PRSI, USC, etc. in the hands of the investor at the relevant rates in the normal way, where applicable, depending on the personal circumstances of the investor. Where appropriate, a credit is given for the DWT deducted against the Income Tax due.
In answer to the question as to the total value of property held by REITs here, a REIT is obliged to file relevant tax returns (VAT, PAYE/PRSI, Corporation Tax, etc.) in the same way as any other company. In addition, it must file an annual statement to Revenue confirming the conditions attaching to being a REIT have been met and is also obliged to file details of DWT deductions on payments made to non-resident shareholders. The legislation does not provide that a REIT must provide information to Revenue as to the total value of property held.
