Real Estate Investment Trusts

Dáil Éireann Debate, Thursday - 18 April 2019

Thursday, 18 April 2019

Questions (77, 78)

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance the amount of property-related income earned by all real estate investment trusts, REITs, in each of the years from 2013 to 2018 and to date in 2019; the amount that is from rent; the amount that is from the sale of properties; the amount of net distributions made in each of the years since 2013; the amount of those distributions paid to domestic income taxpayers, domestic corporate taxpayers and foreign shareholders resident in a location with which Ireland has a double tax treaty; the amount paid by all REITs in dividend withholding tax in each year since 2013; the amount of such tax reclaimed by the taxpayer in each of the years since 2013; and if he will make a statement on the matter. [18338/19]

Michael McGrath

Question:

78. Deputy Michael McGrath asked the Minister for Finance the number of distributions made each year since 2013 from REITs to pension plans, charities and other dividend withholding tax exempt shareholders; and if he will make a statement on the matter. [18339/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 77 and 78 together.

The rules relating to Real Estate Investment Trusts (REITs) in Ireland are found in Part 25A of the Taxes Consolidation Act 1997, and were introduced by Finance Act 2013. Irish REITs are collective investment vehicles which invest in Irish property. As such, their income and gains from Irish property are not taxed within the REIT but are instead taxed in the hands of the investor when distributed. REITs must distribute at least 85% of their property profits and gains to their shareholders each year. A REIT is subject to corporation tax on any income or gains arising from any other, i.e. non-property, business it carries on.

The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by providing the same after-tax returns to investors as direct investment in rental property and removing a double layer of taxation at corporate and shareholder level which would otherwise apply.

Dividend Withholding Tax (DWT) at 20% must be applied to all distributions from REITs, other than distributions to certain limited classes of investors such as pensions and charities as they are more generally exempt from tax. I am advised by Revenue that the available information is the net DWT collected in respect of dividends paid by REITs for 2015 onwards, as shown in the table.

Year	Amount   of DWT Collected
2015	€4.0m
2016	€7.8m
2017	€11.8m
2018	€12.4m

I am advised by Revenue that, due to the obligation to maintain taxpayer confidentiality, it does not disclose information in circumstances where the number of cases is so small that it might facilitate identification of the taxpayers involved. As this is the case with Real Estate Investment Trusts (REITs), it is not possible for Revenue to provide the further information requested. However I would note that REITs are required to be publicly listed companies and as a result they publish a wide range of detailed information, including financial reports, which would provide some of the information requested by the Deputy.