Dáil Éireann Debate, Tuesday - 26 September 2017
84. Deputy Paul Murphy asked the Minister for Finance the details of the exemption of Government securities where an owner is not ordinarily resident in Ireland, which is listed in a Revenue Commissioners' table called "Cost of Tax Allowances, Credits, Exemptions and Reliefs"; and if he will make a statement on the matter. [40569/17]
Amharc ar fhreagraSection 43 of the Taxes Consolidation Act 1997 provides that any securities issued by the Minister for Finance may contain a condition that neither the interest nor the capital on that security are liable to income tax or capital gains tax provided they are held by a non-resident. This is in keeping with the general scheme of the taxation of the returns on financial products where non-residents are not subject to Irish tax. For example deposit interest retention tax (DIRT) does not apply to deposit interest earned by non-residents and exit tax does not apply to non-residents who invest in investment undertakings.
In addition, under Ireland’s double tax treaties there is a restriction on the amount of tax that could be withheld on interest payments to residents of our double tax treaty partners. Some agreements provide for no withholding, while others provide for withholding up to a maximum of 5% to 15%.
I am advised by Revenue that the costing included in the “Cost of Tax Allowances, Credits, Exemptions and Reliefs” is the maximum cost of the exemption. It is calculated as 20% of the Central Bank of Ireland’s figures for interest payments. It therefore does not take account of the effect that double tax agreements would have on Ireland’s right to tax on those interest payments.
