Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Wednesday, 27 May 1992

Vol. 420 No. 4

Ceisteanna—Questions. Oral Answers. - Financial Services Centre.

Michael Noonan

Ceist:

9 Mr. Noonan (Limerick East) asked the Minister for Finance the plans he has to ensure that firms who enjoy the benefits of the tax package attached to the financial services centre in Dublin, and who are at present operating off site, will move into the financial services centre at the earliest possible date; and if he will make a statement on the matter.

Patrick McCartan

Ceist:

13 Mr. McCartan asked the Minister for Finance the number of companies which have been given licences to operate in the International Financial Services Centre, but which are still located outside of the centre; the total value of the tax breaks claimed so far by such companies; if he intends to use the powers available to him under section 38 of the Finance Act, 1987, to withdraw licences and to claw back tax breaks of companies which do not move to the centre; and if he will make a statement on the matter.

John Browne

Ceist:

54 Mr. Browne (Carlow-Kilkenny) asked the Minister for Finance if he will give details of the number of companies which are operating under a licence outside the International Financial Services Centre, but who enjoy the tax benefits of the IFSC; the reason for the long delay in them moving on-site; and if he will amend legislation to regularise their position.

I propose to take Question Nos. 9, 13 and 54 together. To date over 200 projects have been approved for the 10 per cent rate of corporation tax at the IFSC. These projects involve 155 companies and 25 of these have now located in the Custom House docks area. A number of others have committed to move to the centre in the immediate future, on expiry of their existing leases. The remainder are temporarily located outside the area.

It is, of course, a requirement of every tax certificate for the IFSC that the company move to the area as soon as suitable premises become available. It was not possible for all companies to locate in the area on commencement of trade as construction on the site was ongoing and suitable space was not available. It was necessary for many of them. consequently, to enter into short leases for accommodation outside the area.

The position in relation to available accommodation is as follows: Five buildings have now been completed at the centre and three of these — the buildings known as West Block, Harbour Master One and Harbour Master Two — are fully occupied. The only space currently available at the centre is in the other two blocks — North Block and South Block. Negotiations are taking place between the owners of these two blocks and potential occupiers and I understand that the terms of occupancy on offer in these negotiations have recently been improved. While the terms of such lettings are a matter for settlement between the parties concerned, I have taken the step of requesting my Department to write to them expressing my concern that these negotiations should be successfully concluded. I am hopeful that these developments will clear the way for the take-up of the available space.

A further phase of office development in the area is due to commence in August of this year and will involve the construction of two additional blocks. My Department will be monitoring closely the take-up of this space and will be ensuring, in consultation with the Custom House Docks Authority, that adequate advance arrangements are made to ensure that companies will be able to occupy suitable accommodation as it becomes available. The movement of companies to these buildings, when completed, will make a significant impact on the number of companies actually located at the centre. I do not at this time consider it necessary to add to the powers already available to me under current legislation.

In response to Deputy McCartan's reference to the total value of tax breaks claimed by companies, I would point out that the corporation tax yield at 10 per cent rather than 40 per cent does not represent a loss of 30 per cent to the Exchequer. The international financial services activity in Ireland represents new business and new employment which has developed as a result, among other things, of the concessionary tax rates.

(Limerick East): Do I take it from the Minister's reply that there are 130 firms now enjoying the benefits of the tax package of the financial services centre who are located throughout the city of Dublin and who have not yet moved on site?

That is correct. There are three blocks completed and two blocks are partially completed, one owned by the Bank of Ireland group and the other by Mr. Dermot Desmond and his compnay. Both of these are in negotiations with a number of companies. The negotiations have been protracted. Until recently the terms on offer to the various companies were not improved, but within the last four weeks the compulsory escalating rent clause and the review clause which were creating difficulties for a lot of the companies have been removed, so negotiations have recommenced. Following the negotiations we will fill the remaining two blocks fairly quickly. After the builders' holidays two new harbour masters' buildings will commence along with 200 housing units. That is part of the next phase of development which is being negotiated between the Custom House Development Authority and the Custom House Company. That is part of six more office blocks on the site. The first two, which will commence in August, will be 70,000 square feet each. It will be towards the end of next year before they become available.

I very much want to deal with the remaining question and time is of the essence now. A very brief question, Deputy Noonan.

(Limerick East): Would the Minister agree that it is very unfair to those who have invested in the North Block and the South Block, that 130 firms who were set up under licence on condition that they will move on-site, can be scattered through the city of Dublin, and are still enjoying the tax benefits off-site? Will the Minister ensure that the terms of the original legislation in which a time limit was put on companies so that they would have to move on-site within a specific time period, are implemented?

The time for questioning is fast running out.

I agree with the thrust of Deputy Noonan's question. My biggest difficulty is that the accommodation that remains in the two buildings that are available is high specification accommodation. The difference in price between what will be available in the new buildings next year, and what is there at present is fairly massive. Many companies do not require high specification buildings. As soon as buildings are available it is my intention to do all I can to ensure that people move into them.

Barr
Roinn