Dáil Éireann Debate, Friday - 7 September 2018
162. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of tax saved by financial institutions here due to their ability to use historical losses to reduce current liabilities; and if he will make a statement on the matter. [36600/18]
View answerI am informed by Revenue that on the basis of Corporation Tax returns filed for the year 2016, the estimated tax saved by all financial institutions, including insurance companies, due to their ability to use historic losses to reduce tax liabilities was in the region of €925 million. This includes the tax cost associated with capital allowances that are claimed as losses forward if not used in the first year of claim.
Loss relief is a long standing feature of the Irish Corporate Tax system and is relevant to all business sectors. It allows for losses incurred in the course of business to be taken into account when calculating a business’s tax liabilities. Loss relief is a standard feature of Corporation Tax systems in all OECD countries. It recognises the fact that a business cycle runs over several years and that it would be unbalanced to tax profits earned in one year and not allow relief for losses incurred in another.
Further information on trading losses carried forward in various sectors is published in the Revenue statistical report "Corporation Tax 2017 Payments and 2016 Returns", available on the Revenue website at https://www.revenue.ie/en/corporate/documents/research/ct-analysis-2018.pdf.
