asked the Minister for Finance if he will state whether companies carrying on business in this State but managed and controlled in Great Britain pay income and other taxes on their profits to the Revenue Commissioners of this State or to the British Government.
Ceisteanna—Questions. Oral Answers. - British Controlled Companies.
The taxes chargeable on the profits of a company carrying on business in this country are income-tax and corporation profits tax. There are reciprocal double taxation relief arrangements in force between this country and Great Britain which provide for the treatment, for taxation purposes, of the companies of one country which are carrying on business in the other country. Under the Residence Agreement of 1926 (as amended by later agreements of 1928 and 1947) a company managed and controlled in Great Britain is exempt from Irish income-tax. Such a company is, however, chargeable to Irish corporation profits tax here in respect of its profits arising in this country.
I might add that a company managed and controlled here is exempt from British income-tax.
Has the Minister any idea as to what the loss to public funds here is as a result of this arrangement?
The arrangement, which is described as a "Residence Agreement", has been examined on very many occasions here. The conclusion always reached has been that the arrangement is beneficial to this country.