Vol. 488 No. 1
46 Proinsias De Rossa asked the Minister for Finance the rate at which the main banks pay tax on profits; the actual amount of tax paid by the four main banks as a proportion of their profits; if he has satisfied himself with the tax take from the banks; and if he will make a statement on the matter. [5528/98]
Profits earned by banks are liable to corporation tax at the standard rate, currently 32 per cent with a reduced rate of 25 per cent on the first £50,000 of annual profits. Profits of the banks which arise from licensed trading operations in the IFSC are subject to a rate of 10 per cent.
I am informed by the Revenue Commissioners that the estimated corporation tax paid by the four main associated banks in 1997 was £103 million. This amount does not include the amount of overseas tax paid by the banks in 1997, which could be significant. The additional tax paid by subsidiary companies is not included in the figure shown. The Revenue Commissioners have advised that on the basis of 1995-96 statistics, the latest available, the tax liability for that year of identifiable subsidiaries was of the order of £22 million.
The latest information available in relation to the profits of these banks is in respect of accounting periods falling between 1 April 1995 and 31 March 1996. The corporation tax liability of these banks for that period, including the tax payable on foreign and IFSC profits, as a proportion of their total income before allowances and deductions, is estimated at 30 per cent.
The tax position of the banks and other financial institutions is kept under continuous review and action can be taken if need be to secure the revenues to the State from this important sector.
