Dáil Éireann Debate, Thursday - 29 March 2018
108. Deputy Stephen S. Donnelly asked the Minister for Finance if he will report on the additional tax take by the State gained through changes to the taxation of section 110 companies introduced in 2016 and 2017; and if he will make a statement on the matter. [14775/18]
Amharc ar fhreagraFinance Act 2016 made certain changes to the taxation of qualifying companies, within the meaning of section 110 Taxes Consolidation Act 1997 (“TCA 1997”). The changes related to the taxation of profits which were derived from Irish land and buildings. Those changes took effect from 6 September 2016.
A further amendment was made in Finance Act 2017 which came into force in respect of interest accrued on or after 19 October 2017.
There are a number of factors that make it hard, at this point, to judge the full impact of those amendments:
- Payments: The timing of payments of tax by companies is complex and makes it difficult to judge the impact of the amendments in the early years.
- Returns : For companies with a 31 December year end, as most section 110 companies do, their corporation tax returns (Form CT1) for 2016 were filed on 23 September 2017.
However, those returns will only show 4 months of profits impacted by the 2016 Finance Act. In addition the Finance Act 2017 amendments will impact approximately 3 months of profits for the 2017 year end. Therefore the full impact of both the 2016 and 2017 Finance Act amendments will not be visible until the taxable profit details are filed for the year ending 2018 on 23 September 2019.
- Deterrent : As the amendments were anti-avoidance in nature, they are designed to have a deterrent effect. The success of such measures is the reduction in the activity taking place rather than an increase in tax raised.
That said outlined below are the payment received from section 110 companies during 2015, 2016 and 2017. Please note these figures are provisional and subject to change.
|
Year |
€'m |
|
2015 |
65 |
|
2016 |
199 |
|
2017 |
128 |
The above year represents the year in which the payment was received, and not the year to which the payment relates.
Revenue advise me that while the CT1 for accounting periods ending in 2016 have been filed in 2017 (with the data currently being processed and analysed), returns for 2017 tax year for most companies will be due for filing by 23 September 2018. These 2017 returns require certain information from qualifying companies in respect of their Irish property businesses. When the qualifying companies file those returns, Revenue will be in a position to quantify the Irish property base of qualifying companies. Allowing for late returns and processing of data, data from returns filed in September 2018 will be available for analysis in early 2019.
